CRS Reports

Commerce, Justice, Science, and Related Agencies: FY2015 Appropriations

This report will track and describe actions taken by the Administration and Congress to provide FY2015 appropriations for the Commerce, Justice, Science, and Related Agencies (CJS) accounts. It also provides an overview of FY2014 appropriations for agencies and bureaus funded as a part of the annual appropriation for CJS.

Apr 28, 2014

Navy TAO(X) Oiler Shipbuilding Program: Background and Issues for Congress

This report provides background information and issues for Congress on the TAO(X) oiler shipbuilding program, a program to build a new class of fleet oilers for the Navy. The report discusses the issue for Congress which is whether to approve, reject, or modify the Navy's funding requests and acquisition strategy for the TAO(X) program.

Apr 25, 2014

Medicaid Financial Eligibility for Long-Term Services and Supports

Apr 24, 2014

Conservation Provisions in the 2014 Farm Bill (P.L. 113-79)

The Agricultural Act of 2014 (2014 farm bill, P.L. 113-79) was enacted on February 7, 2014. After years of debate and deliberation, the enacted 2014 farm bill included a number of changes to the Conservation title (Title II), including program consolidation and reauthorization, amendments to conservation compliance, and a reduction in overall funding. Debate on the 2014 farm bill focused on a number of controversial issues. While many did not consider conservation to be controversial, nonetheless, a number of policy issues shaped the final version of the title and ultimately its role in the enacted farm bill. Prior to the 2014 farm bill, there were over 20 distinct conservation programs. Discussion about simplifying or consolidating conservation programs to reduce overlap and duplication, and to generate savings, has continued for a number of years. The 2014 farm bill contained several program consolidation measures, including the repeal of 12 active and inactive programs, the creation of two new programs, and the merging of two programs into existing ones. Overall changes include the following. The act reauthorizes larger conservation programs through FY2018, including the Environmental Quality Incentives Program (EQIP), the Conservation Stewardship Program (CSP), and the Conservation Reserve Program (CRP). It authorizes a new Agricultural Conservation Easement Program (ACEP), which retains most of the program provisions in the repealed easement programs (Wetlands Reserve Program [WRP], easements under the Grasslands Reserve Program [GRP], and Farmland Protection Program [FPP]). ACEP establishes two types of easements: agricultural land easements and wetland reserve easements. It authorizes a new Regional Conservation Partnership Program (RCPP) from the repealed partnership programs (Agricultural Water Enhancement Program [AWEP], Cooperative Conservation Partnership Initiative [CCPI], Chesapeake Bay Watershed Program [CBWP], and Great Lakes Basin Program for soil erosion and sediment control [GLBP]). RCPP creates partnership opportunities to target and leverage federal conservation funding for specific areas and resource concerns. It incorporates other programs, such as the Wildlife Habitat Incentives Program (WHIP) and grazing contracts under GRP, into larger reauthorized programs—EQIP and CRP, respectively. One of the most controversial issues in the 2014 farm bill debate was whether federal crop insurance subsidies should be included on the list of program benefits that could be lost if a producer were found to be out of compliance with conservation requirements on highly erodible land and wetlands. Ultimately the 2014 farm bill did add federal crop insurance subsidies to the list of benefits that could be lost and extended limited protection for native sod in select states. The 2014 farm bill also reduced funding for the Conservation title by $3.97 billion over 10 years. Most farm bill conservation programs are authorized to receive mandatory funding, and the Conservation title makes up 6% of the total farm bill 10-year baseline, or $58 billion of the total $956 billion in mandatory funding authorized in the 2014 farm bill.

Apr 24, 2014

National Special Security Events: Fact Sheet

Major federal government or public events that are considered to be nationally significant may be designated by the President—or his representative, the Secretary of the Department of Homeland Security—as National Special Security Events (NSSEs). These events include presidential inaugurations, presidential nominating conventions, major sporting events, and major international meetings. The U.S. Secret Service was designated as the lead federal agency responsible for coordinating, planning, exercising, and implementing security for National Special Security Events by P.L. 106-544, December 19, 2000.

Apr 24, 2014

Charter School Programs Authorized by the Elementary and Secondary Education Act (ESEA Title V-B): A Primer

This report provides an overview of each of the three charter school programs included in Title V-B of the Elementary and Secondary Education ActE (SEA). It also discusses national activities that are authorized under Title V-B-1. It concludes with a discussion of substantive changes that have been made to these programs through annual appropriations acts since FY2010.

Apr 22, 2014

Achievements of and Outlook for Sanctions on Iran

Most experts agree that the multilateral sanctions imposed on Iran since 2010 have contributed significantly to producing flexibility in Irans position on the scope of its nuclear program. There is similar agreement that the effect of sanctions on Irans foreign policyparticularly on its core interests in the Middle East regionand on its human rights practices, appear to have been minimal to date. In assessing effectiveness, however, it is difficult to separate the effect of sanctions from other variables such as Irans purported economic mismanagement, attitudes of the Iranian public, and Iranian politics. Interim Nuclear Deal of 2013 Sanctions have been eased temporarily under an interim nuclear deal of November 2013 (Joint Plan of Action, JPA), which included a commitment from the United States to impose no new nuclear-related sanctions for the JPA period (until July 20, 2014). Virtually any next step in U.S. and multilateral sanctions on Iran is likely to depend on the course of negotiations for a comprehensive agreement on Irans nuclear program. Opinion in the United States on the future course of Iran sanctions is deeply divided. As Congress has been an active proponent of sanctions on Iran for many years, it will remain keenly interested in the future direction of Iran sanctions policy. Proponents of Additional Sanctions While negotiations on a comprehensive nuclear settlement are going on, some assert that additional sanctions would reinforce the pressure that appears to have encouraged Iran to accept the JPA and increase Iranian willingness to reach an acceptable permanent settlement. Proponents of increased sanctions maintain that additional sanctions will also prevent an erosion of existing sanctions caused by a perception that the JPA has ended Irans international isolation. Critics of Additional Sanctions Critics of this approach maintain that additional sanctions imposed while comprehensive nuclear settlement talks are in progress would reinforce hardliners in Iran who oppose a nuclear agreement with the United States out of distrust of U.S. intentions. Adding sanctions could also cause U.S. partners to separate their Iran policies from those of the United Statesparticularly if there is a collapse in the negotiations that appears to stem from what others consider to be excessive U.S. demands. Alternatively, a failure of negotiations that is attributed to Irans unwillingness to accept seemingly reasonable offers would likely lead to a broad international increase in sanctions on Iran. The Joint Plan of Action and Additional Future Possibilities The JPA commits the Administration and its negotiating partners to lifting nuclear-related sanctions on Iran if there is a comprehensive nuclear deal. Because of the substantial overlap between nuclear related sanctions and those imposed primarily because of other issues, in practice that represents a commitment to broad sanctions relief. Those who support that commitment maintain that Iran will not have the incentive to agree to a permanent settlement unless there is the prospect of substantial sanctions relief. Critics of this view argue that broad sanctions relief will provide Iran even more resources with which it can support militant movements that oppose U.S. interests in the Middle East, and will not likely compel Iran to conform to international standards of human rights practices. The future course of Iran sanctions could also be affected by Iranian actions that are unrelated to the nuclear talks. Such actions might include a crackdown against any new popular unrest in Iran, a catastrophic terrorist attack by one of Irans regional allies, expanded Iranian military intervention in Syria, or a power shift in Iran back toward opponents of a nuclear settlement. Underlying these debates is a lack of consensus over what would constitute an acceptable final nuclear settlement. On the nuclear issues, some argue that any settlement must result in full dismantlement of Irans nuclear program. The Administration has indicated in the JPA that it might accept an outcome that allows Iran to retain a limited and extensively monitored uranium enrichment program.

Apr 22, 2014

The Target Data Breach: Frequently Asked Questions

This report answers some frequently asked questions about the Target (store) data breach, including what is known to have happened in the breach, and what costs may result. It also examines some of the broader issues common to data breaches, including how the payment system works, how cybersecurity costs are shared and allocated within the payment system, who bears the losses in such breaches more generally, what emerging cybersecurity technologies may help prevent them, and what role the government could play in encouraging their adoption, as well as some of the legislation that the 113th Congress has introduced to deal with these issues.

Apr 22, 2014

Crop Insurance Provisions in the 2014 Farm Bill (P.L. 113-79)

Congressional Research Service 7-5700 www.crs.gov R43494 Summary The enacted 2014 farm bill (the Agricultural Act of 2014; P.L. 113-79) enhances the federal crop insurance program by expanding its scope, covering a greater share of farm losses, and making other modifications that broaden policy coverage. The changes stem from the desire of many in Congress, particularly members of the agriculture committees, to bolster what they consider to be the most significant aspect of the farm safety net. Under the federal crop insurance program, which is administered by the U.S. Department of Agriculture’s Risk Management Agency (RMA), producers purchase subsidized policies to help manage financial risks associated with crop yield or revenue losses, primarily from natural disasters. In contrast, farm commodity programs apply to a narrower set of “program” crops, require no participation fees, and make payments when prices fall below statutory minimums or when crop revenue is low relative to historical levels. A prominent crop insurance feature of the 2014 farm bill is the authorization of policies designed to reimburse “shallow losses”—an insured producer’s out-of-pocket loss associated with the policy deductible. A new crop insurance policy called Stacked Income Protection Plan (STAX) is made available for upland cotton producers, while the Supplemental Coverage Option (SCO) is made available for other crops. The STAX policy indemnifies losses in county revenue of greater than 10% of expected revenue but not more than the deductible level (e.g., 25%) selected by the producer for the underlying individual policy. (It can also be purchased as a stand-alone policy.) Similarly, SCO is based on expected county revenue (or yields) and covers part of the deductible under the producer’s underlying policy. The government subsidy as a share of the policy premium is set at 80% for STAX and 65% for SCO. A variety of additional provisions are expected to expand existing crop insurance products or require examination of the potential for new products, including those that would benefit specialty crops and animal agriculture. Provisions revise the value of crop insurance for organic crops to reflect generally higher prices of organic (not conventional) crops. USDA is also required to conduct more research on whole farm revenue insurance with higher coverage levels than currently available. Studies or policies are also required for insuring (1) specialty crop producers for food safety and contamination-related losses, (2) swine producers for a catastrophic disease event, (3) producers of catfish against reduction in the margin between the market prices and production costs, (4) commercial poultry production against business disruptions caused by integrator bankruptcy, (5) poultry producers for a catastrophic event, (6) producers of biomass sorghum or sweet sorghum grown as feedstock for renewable energy, and (7) alfalfa producers. A peanut revenue insurance product and rice margin insurance also are mandated. Another provision provides funding for index weather insurance for protecting against weather. To address conservation concerns, the 2014 farm bill links eligibility for crop insurance premium subsidies to compliance with wetland and conservation requirements for highly erodible land. Also, crop insurance subsidies are reduced for plantings on native sod acreage in certain states. In total, the crop insurance title increases funding for crop insurance by an additional $5.7 billion over 10 years relative to projected levels that assumed no change in policy. The largest cost items are for STAX ($3.3 billion) and SCO ($1.7 billion), according to the Congressional Budget Office. A controversial item not included in P.L. 113-79 was the reduction of premium subsidies for high-income farmers, which had been included in the Senate farm bill but not the House bill. Contents Introduction 1 Crop Insurance Background 1 Policy Rationale for Federal Crop Insurance 1 Authorizing Legislation 2 Insurable Commodities and Types of Policies 2 Program Structure and Federal Costs 3 Crop Insurance Provisions in the 2014 Farm Bill 3 Stacked Income Protection Plan (STAX) for Upland Cotton 4 Supplemental Coverage Option (SCO) 5 “Enterprise Units” and Yield Guarantees 6 Peanuts and Rice 7 Alfalfa and Industrial Crops 7 Provisions for Specialty Crop Producers 7 Whole Farm Insurance 7 Organic Prices for Insuring Crops 8 “NAP” Enhancement 8 Index-based Weather Insurance 9 Food Safety Insurance Study 9 Studies for Animal Agriculture Insurance 9 Conservation Provisions 9 Provisions for Beginning Farmers 10 “Budget Neutral” for the Next Standard Reinsurance Agreement 10 Premium Subsidies 11 Estimated Cost of the Crop Insurance Title 11 Figures Figure 1. Stacked Income Protection Plan (STAX) with a Crop Loss 5 Figure 2. Supplemental Coverage Option (SCO) with a Crop Loss 6 Tables Table 1. Cost of Provisions in the Crop Insurance Title of the 2014 Farm Bill 12 Appendixes Appendix. Crop Insurance Provisions in the Enacted 2014 Farm Bill 13 Contacts Author Contact Information 1 Acknowledgments 1 Introduction The federal crop insurance program is considered by many farmers and policy makers as the centerpiece of the farm safety net. The program makes available subsidized insurance policies for about 130 commodities ranging from apples to wheat. These “multiple peril” policies help producers manage financial risks associated with crop yield or revenue losses. Insurable causes of losses include adverse weather (e.g., drought and flood), insects or disease outbreaks, and failure of irrigation water supply. The enacted 2014 farm bill (the Agricultural Act of 2014; P.L. 113-79) enhances the federal crop insurance program by expanding its scope, covering a greater share of farm losses, and making a variety of other modifications that broaden policy coverage. This report describes in detail changes made to the program as part of the 2014 farm bill. A table at the end of this report (Table A-1) provides a side-by-side comparison of the crop insurance provisions in Title XI of the 2014 farm bill and the permanent authorizing statute for federal crop insurance (Federal Crop Insurance Act, 7 U.S.C. §1501 et seq.), prior to enactment of the 2014 farm bill. Two other key elements of the farm safety net are (1) the farm commodity programs, which provide price and income support for a much narrower list of “covered and loan commodities” such as corn, soybeans, wheat, rice, and peanuts; and (2) agricultural disaster programs, which primarily assist producers owning livestock or fruit trees. For information on these programs as modified by the 2014 farm bill, see CRS Report R43448, Farm Commodity Provisions in the 2014 Farm Bill (P.L. 113-79), and CRS Report RS21212, Agricultural Disaster Assistance. Crop Insurance Background Policy Rationale for Federal Crop Insurance In 1938, Congress established the federal crop insurance program following several unsuccessful attempts by the private sector to sell multiple-peril policies, beginning in the late 1800s. These ventures lost money and were discontinued because areas they covered were too small to adequately distribute risks when crops failed. Since then, private crop insurance has focused on single peril insurance for causes of loss not correlated across wide areas, such as hail or fire. Agricultural weather risks typically affect a large area rather than individual farms, resulting in potential losses that historically have been considered too large for private insurers. Others, though, contend that international financial markets have expanded dramatically in recent decades and now have significant capacity to provide coverage of risks that are much greater than those associated with potential crop losses. Separately, the crop insurance program must address problems associated with moral hazard, such as farmers intentionally under-applying crop inputs to collect indemnities. Another issue is adverse selection, whereby high-risk farmers tend to participate more than low-risk farmers, thus increasing program costs. Some argue that the government is in a better position than the private sector to address these issues and monitor farm behavior and losses given better access to data and linkages with farm program benefits. From a demand standpoint, federal subsidies for purchasing crop insurance have been increased over the years to improve affordability and boost farmer participation. In general, the premium required to cover the cost of crop insurance is more than producers are willing to pay. As a result, in the absence of federal subsidies, U.S. agricultural acreage covered by crop insurance and coverage levels selected by farmers would likely be lower, potentially increasing the odds of a costly federal bailout in the event of a catastrophic weather event. Proponents of federal crop insurance argue that the program is essential because it provides specific risk management solutions that benefit farmers, input suppliers, the entire agricultural sector, and ultimately all food consumers. They also say widespread participation reduces the potential for ad-hoc disaster spending, a longstanding policy goal. In contrast, critics argue that the program covers an excessive amount of producer risk, inappropriately subsidizes large farms, wastes taxpayer dollars, and encourages crop production on environmentally fragile lands. Authorizing Legislation The federal crop insurance program is permanently authorized by the Federal Crop Insurance Act, as amended (7 U.S.C. §1501 et seq.). The Federal Crop Insurance Corporation (FCIC) was created as a wholly-owned government corporation in 1938 to carry out the program. The program is administered by the U.S. Department of Agriculture’s Risk Management Agency (RMA). Insurable Commodities and Types of Policies Policies are available for approximately 130 crops and cover more than 250 million acres nationwide. Insurable commodities include major field crops such as wheat, corn, soybeans, cotton, peanuts, and rice, as well as many specialty crops (including fruit, tree nut, vegetable, and nursery crops), pasture, rangeland, and forage crops. For major crops, three-fourths or more of U.S. planted acreage is insured under the federal crop insurance program. Farmers annually purchase about 1.2 million policies, with many producers purchasing multiple policies depending on farm size and number of crops grown. The policies protect against individual farm losses in yield, crop revenue, or whole farm revenue. Area-wide policies are available for some crops, whereby an indemnity is paid when there is an overall loss over a broad area level. In general, yield-based policies offer a guarantee at the individual farm level or area-wide (e.g., county) level. For revenue policies, the insurance guarantee also incorporates the expected market price prior to planting (i.e., no statutory minimum prices as provided in some farm programs). For some policies, the guarantee can increase if the harvest price is higher than the expected price, thereby increasing the point at which indemnities are triggered. The producer selects a coverage level and absorbs the initial loss through the deductible. For example, a coverage level of 70% has a 30% deductible (for a total equal to 100% of the expected value prior to planting the crop). The producer pays a portion of the premium which increases as the level of coverage rises. The federal government pays the rest of the premium—62%, on average, in 2013—plus the cost of selling and servicing the policies. This differs from farm commodity programs, which require no participation fees. Also unlike farm commodity programs, crop insurance has no subsidy limits, and participants can be eligible regardless of income levels. Program Structure and Federal Costs The federal crop insurance program is a partnership between RMA (through the FCIC) and private industry. RMA approves and supports products, develops and approves the premium rates, administers premium subsidies, reimburses private companies for their administrative and operating costs (i.e., delivery costs for selling and servicing the policies), and reinsures company losses. RMA also sponsors educational and outreach programs and seminars on the general topic of risk management. Approximately 19 private insurance companies provide the “boots on the ground” for selling and servicing the insurance policies through a network of agents. They also share risk (profit/loss potential) with the government. The Standard Reinsurance Agreement (SRA) defines the risk-sharing arrangement, whereby insurance companies may transfer some liability associated with riskier policies to the federal government and retain profits/losses from less risky policies. During FY2009-FY2013, federal costs averaged $8.4 billion per year, varying between $3.7 billion in FY2010 and $14.1 billion in FY2012, depending on crop losses and commodity prices, which affect premium subsidy amounts and program liability (e.g., high market price result in high premiums and liability). Crop Insurance Provisions in the 2014 Farm Bill The general enhancement of the federal crop insurance program in the 2014 farm bill stems from the desire of many in Congress, particularly members of the agriculture committees, to bolster what they consider to be the most significant aspect of the farm safety net. Unlike farm commodity programs, federal crop insurance is applicable to a wide variety of crops and requires producers to pay for at least part of the program. Producers are indemnified only after an insurable crop loss. During the farm bill debate, some in Congress voiced concerns that the program is too generous. Congress considered but did not pass premium caps and/or income limits on crop insurance similar to ones governing farm commodity program payments. For crop insurance in the 2014 farm bill, a prominent feature is the authorization of policies designed to reimburse “shallow losses”—an insured producer’s out-of-pocket loss associated with the policy deductible. These include a new crop insurance policy called Stacked Income Protection Plan (STAX) for upland cotton and the Supplemental Coverage Option (SCO) for other crops. A variety of additional provisions are expected to expand existing crop insurance products or require FCIC to examine the potential for new products, including those benefiting specialty crops and animal agriculture. Stacked Income Protection Plan (STAX) for Upland Cotton Beginning with the 2014 farm bill, upland cotton is no longer a “covered commodity,” making upland cotton producers ineligible for either Price Loss Coverage (PLC) or Agriculture Risk Coverage (ARC) under the farm commodity support programs. Instead, upland cotton is eligible for Stacked Income Protection (STAX), which is a revenue-based, area-wide crop insurance policy that may be purchased as a stand-alone policy for primary coverage or purchased in tandem with an individual farm loss policy or area policy. This major policy revision was sought by U.S. cotton producers in an attempt to resolve a long-running trade dispute with Brazil that requires changing the U.S. cotton support program so it does not distort international markets. Critical to participation, and as part of the agreement to make upland cotton ineligible for the PLC/ARC programs, is the government’s share of the premium cost. The federal subsidy is 80% for STAX and the government pays for delivery costs. Policies are to be offered in all producing counties at the county level, or on the basis of a larger geographic area if necessary. A payment rate multiplier of 120% is available if producers want to increase the amount of protection per acre. The indemnity from STAX is triggered by a revenue loss at the county level. When purchased as a “stacked” policy, the indemnity is designed to cover part of the deductible of the underlying policy. Specifically, STAX would indemnify losses in county revenue of greater than 10% of expected revenue but not more than 30%. For producers purchasing STAX in conjunction with an individual policy, the maximum coverage under STAX cannot exceed the deductible level selected by the producer in the underlying individual policy. For individual producers, indemnities for STAX and other policies cannot overlap. A graphical illustration of STAX is shown Figure 1. The bar on the left depicts the expected revenue (prior to planting) under a typical cotton crop insurance revenue policy with a 30% deductible (the farmer absorbs the first 30% of the loss). The expected revenue is the 10-year average yield for an individual producer times the expected market price (the average futures market price prior to planting). The insurance guarantee is set at 70% of the expected revenue (100% minus the 30% deductible). Upon harvest, if actual revenue falls short of the guarantee, an initial indemnity is triggered under the farmer’s individual crop insurance policy as depicted by the green box in the right-hand column. If a STAX policy is also purchased and there is a loss at the county level, a STAX indemnity would be paid (depicted by the blue box). Overall, the farmer incurs a loss of approximately 10% (white box at top), with the STAX indemnity reducing the amount of “shallow loss” absorbed by the producer. Figure 1. Stacked Income Protection Plan (STAX) with a Crop Loss (STAX for upland cotton covers part of the deductible under the individual policy) Source: CRS. Notes: A STAX indemnity (blue box above) is triggered when actual county revenue is less than 90% of expected county revenue. Scenario assumes expected (and actual) revenue is the same at the individual farm and county level (STAX). STAX may be purchased as a stand-alone policy for primary coverage. Upland cotton acres enrolled in STAX are not eligible for SCO. Supplemental Coverage Option (SCO) Like STAX but for other crops, the Supplemental Coverage Option (SCO) is authorized by the 2014 farm bill to cover part of the deductible under the producer’s underlying policy (the “shallow loss”). SCO is an area-wide (e.g., county) loss policy, whereby an indemnity is paid on area losses not more than the deductible level (e.g., 25%) selected by the producer for the underlying individual policy. However, unlike STAX, the SCO guarantee can be based on either expected county yields or revenue, and it must be purchased in conjunction with a traditional crop insurance policy. Indemnities are triggered by county losses greater than 14%, and policy coverage cannot exceed the difference between 86% and the coverage level selected by the producer for the underlying policy. A graphical illustration of SCO is shown in Figure 2. The bar on the left depicts the expected revenue (prior to planting) under a typical crop insurance revenue policy with a 30% deductible (the farmer absorbs the first 30% of the loss). The expected revenue is the 10-year average yield for a producer times the expected market price (e.g., average futures market price for major crops). The guarantee is set at 70% of the expected revenue (100% minus the 30% deductible). If a loss occurs on the farm, an initial indemnity is triggered under the farmer’s individual crop insurance policy as depicted by the green box in the right-hand column. If an SCO policy is also purchased and there is also a loss at the county level, a indemnity from the SCO also would be paid (depicted by the blue box). Overall, the farmer incurs a loss of approximately 14% (white box at top), with the SCO indemnity reducing the “shallow loss” absorbed by the producer. Figure 2. Supplemental Coverage Option (SCO) with a Crop Loss (SCO covers part of the deductible under the individual policy) Source: CRS. Notes: SCO indemnity (in blue box above) is triggered by a loss in county revenue (or yield if underlying individual policy is yield-based). Scenario assumes expected (and actual) revenue is the same at the individual farm and county level (SCO). SCO is designed to serve as a “shallow loss” program for covered commodities enrolled by producers in Price Loss Coverage (PLC) under the farm commodity support program. A separate PLC payment would be made if the farm price for the crop is below a “reference price” set in statute. For crops enrolled in the alternative Agriculture Risk Coverage (ARC) program, SCO is not available because ARC is already designed to pay for “shallow losses.” SCO policies are to be offered for crops that have sufficient data for policy development, and coverage is to begin no later than the 2015 crop year. USDA has announced plans for developing 2015 policies for corn, grain sorghum, rice, soybeans, winter wheat, spring wheat, and cotton. The government subsidy as a share of the policy premium is 65%. “Enterprise Units” and Yield Guarantees Currently available policies are enhanced through a number of provisions beginning with the 2015 crop year. To provide better coverage for producers with both irrigated and nonirrigated crops, separate insurable “enterprise” units for each practice will be available (an enterprise unit is all land for a single crop in a county, regardless of the tenant/landlord structure). Separating the acreage can increase risk protection for producers because losses on dryland crops would no longer be offset by higher yields on irrigated acreage when the two are combined. Another concern of producers in recent years has been the treatment of poor yields used to establish the insurance guarantee, which is based on 4 to 10 years of historical yields called actual production history (APH). Current law allows a “yield plug” if the producer’s actual or appraised yield for any particularly year is less than 60% of the “transitional yield,” generally based on the 10-year historical county average yield. The yield plug allows the replacement of a low actual yield in the APH with a yield equal to 60% of the applicable transitional yield. The 2014 farm bill enhances this provision by keeping the yield plug unchanged from current law (except in the case of native sod) but allowing producers to exclude without replacement any recorded or appraised yield from the APH calculation if the average crop yield in the county for any particular year is less than 50% of the 10-year county average. Peanuts and Rice The peanut and rice industries successfully argued for enhanced crop insurance options. The 2014 farm bill mandates a peanut revenue insurance product and rice margin insurance, with both to be made available for the 2015 crop year. For several years, rice producers have been interested in protecting against rising cost of inputs (e.g., fuel, fertilizer) as it affects their margin (income minus costs). For peanut producers, the revenue policy is to use the “Rotterdam price index” or other appropriate prices as determined by the Secretary. Setting the price guarantee is problematic for peanuts because the market is considered “thin,” with only two peanut shellers reportedly buying over 80% of all peanuts from growers. No futures market exists for peanuts, and private contracts between producers and shellers reportedly account for most transactions, making it difficult to independently verify pricing needed to help set price parameters in the insurance policies. Alfalfa and Industrial Crops The 2014 farm bill also requires FCIC to enter into contracts to conduct research and development on modifications to insurance currently available for alfalfa through the “forage production” policy. Geographic coverage of the existing policy is limited, and supporters of the provision have said that loss coverage has been inadequate. FCIC is also to research policies for crops currently not insurable, including biomass sorghum and sweet sorghum grown expressly for the purpose of producing a feedstock for renewable biofuel, renewable electricity, or biobased products. Provisions for Specialty Crop Producers Federal crop insurance is available for over 80 specialty crops (including fruit, tree nut, vegetable, and nursery crops), making the program the primary financial safety net for specialty crop producers. While additional policies have been introduced over the last 10 years, producer groups and some Members of Congress during the farm bill debate wanted to improve the safety net for specialty crops, in part since these crops are not eligible for farm commodity support programs. Whole Farm Insurance USDA is required to conduct more research on whole farm revenue insurance with higher coverage levels than currently available under the Adjusted Gross Revenue (AGR) and AGR-Lite policies which insure revenue of the entire farm rather than an individual crop. In general, the AGR products are designed to protect producers with specialty crops and/or commodities not covered by individual policies. Historically, whole-farm insurance has seen limited participation, in part because the products are complex, the policies are available only in some parts of the country, and the maximum available coverage of 80% is considered too low for adequate risk protection. FCIC has been working on a revised whole farm insurance plan that reportedly reflects provisions on whole farm insurance specified in the 2014 farm bill. The farm bill provisions include increasing available coverage from 80% to 85%, and a maximum liability of $1.5 million, up from $1 million for AGR-Lite. Also, eligible producers are to include direct-to-consumer marketers and producers who produce multiple agricultural commodities, including specialty crops, industrial crops, livestock, and aquaculture products. FCIC also may provide diversification-based additional coverage payment rates, premium discounts, or other enhanced benefits in recognition of the risk management benefits of crop and livestock diversification strategies for producers. FCIC can also expand coverage for the value of any packing, packaging, or any other similar on-farm activity that FCIC determines to be the minimum required in order to remove the commodity from the field. Organic Prices for Insuring Crops Current law requires FCIC to broaden coverage for organic crops. To reflect the higher product value and provide additional protection for producers, organic price elections have been made available for 16 crops as of early 2014. The 2014 farm bill extends the current practice by requiring FCIC to offer price elections by 2015 that reflect actual retail or wholesale prices of organic (not conventional) crops for all organic crops produced in compliance with standards issued by USDA under the Organic Foods Production Act of 1990. “NAP” Enhancement When crop insurance is not available, catastrophic coverage under the existing noninsured crop disaster assistance program (NAP) can be purchased from USDA’s Farm Service Agency. NAP applicants pay an administrative fee (currently $250 per crop), and no premium is charged (like CAT crop insurance). In order to receive a NAP payment, a producer must experience at least a 50% crop loss caused by a natural disaster, or be prevented from planting more than 35% of intended crop acreage. For production losses in excess of the minimum, a producer receives 55% of the average market price for the commodity. In order to expand coverage for specialty crops and others covered under NAP, the 2014 farm bill provides additional coverage at 50% to 65% of established yield and 100% of average market price. The farmer-paid premium for additional coverage is 5.25% times the product of the selected coverage level and value of production (acreage times yield times average market price). Also, the per-person payment limit is increased from $100,000 to $125,000. Separately, to assist producers with fruit crop losses in 2012, payments associated with additional coverage are made retroactively (minus premium fees) in counties declared a disaster due to freeze or frost. Index-based Weather Insurance FCIC is authorized to conduct two or more pilot programs (and approve subsequent policies) for index-based weather insurance. Index weather insurance protects against specific weather events and not actual losses. Priority is given to specialty crops (e.g., fruits and vegetables) and livestock commodities (including pasture, rangeland, and forage) that have had no available coverage or have low participation rates under existing coverage. The subsidy shall not exceed 60% of the estimated premium amount. Administrative and operating expenses are to be reimbursed as with other policies, but federal reinsurance, research and development costs, and other reimbursements or maintenance fees are not provided for these policies. Expenditures from the FCIC fund are limited to $12.5 million per year for FY2015-2018. Policies may be sold by the approved insurance provider that submits the application as well as others who agree to pay maintenance fees to the submitting provider. Policies cannot be substantially similar to privately available hail insurance. Food Safety Insurance Study The 2014 farm bill requires FCIC to contract for a study on coverage for specialty crops that would indemnify producers for production or revenue losses related to food safety concerns such as government, retail, or national consumer group announcements of a health advisory, product removal, or recall related to a contamination concern. FCIC must submit a report to Congress within one year of enactment of the farm bill. Studies for Animal Agriculture Insurance Compared with the crop sector, the federal crop insurance program provides only limited coverage for the livestock industry. Relatively new or pilot programs protect livestock and dairy producers from loss of gross margin or price declines. Livestock producers can also insure against hay and forage losses through the Forage Production policy (see “Alfalfa and Industrial Crops” above) and the Pasture, Rangeland, and Forage program, which uses a rainfall index or vegetative index to determine loss. The 2014 farm bill directs FCIC to study a variety of topics that could lead to additional insurance policies for animal agriculture. FCIC is required to enter into contracts to conduct research and development on policies for the margin between the market value of catfish and input costs and poultry business interruption insurance for poultry growers, including losses due to bankruptcy of an integrator (owner-processor). FCIC is also required to contract for studies on insuring swine producers for a catastrophic event and insuring poultry producers for a catastrophic event. Conservation Provisions As directed in the conservation title (II) of the 2014 farm bill, crop insurance premium subsidies are available only if producers are in compliance with wetland conservation requirements and conservation requirements for highly erodible land. USDA expects most producers will be unaffected because the same requirement has been in place for years to maintain eligibility for farm program and other USDA benefits. Also, to limit the incentive to convert native sod to cropland, a separate provision in the crop insurance title affects producers purchasing policies for crop insurance or noninsured crop disaster assistance program (NAP). For the first four years of planting on native sod acreage in Iowa, Minnesota, Montana, Nebraska, North Dakota, and South Dakota, farmers will pay more for the risk coverage through reduced crop insurance subsidies or higher NAP fees, and the yield guarantee is reduced compared to other cropland. For details, see Table A-1. Provisions for Beginning Farmers To help develop the next generation of producers, the 2014 farm bill makes several changes to benefit beginning farmers or ranchers with less than five years of experience. For example, to reduce the cost of purchasing crop insurance for beginning farmers or ranchers, the $300 fee for purchasing catastrophic (CAT) coverage is waived. Also, the premium subsidy schedule for additional coverage is increased by 10 percentage points. To boost the yield guarantee for beginning farmers, the calculation can now use yields recorded by prior producers on the acreage, which might be higher than the alternative when historical data are not available (i.e., 65% of the transitional yield based on county average yields). When his

Apr 22, 2014

Trade Promotion Authority (TPA): Frequently Asked Questions

This report provides background information Trade Promotion Authority (TPA), and discusses U.S. trade negotiating objectives, procedures for congressional-executive notification and consultation, and expedited legislative procedures.

Apr 21, 2014

FY2015 Budget Documents: Internet and GPO Availability

This report provides brief descriptions of the budget volumes and related documents, together with Internet addresses, Government Printing Office (GPO) stock numbers, and prices for obtaining print copies of these publications. It also explains how to find the locations of government depository libraries, which can provide both printed copies for reference use and Internet access to the online versions.

Apr 17, 2014

Iran-North Korea-Syria Ballistic Missile and Nuclear Cooperation

This report describes the key elements of a nuclear weapons program; explains the available information regarding cooperation among Iran, North Korea, and Syria on ballistic missiles and nuclear technology; and discusses some specific issues for Congress.

Apr 16, 2014

Advance Appropriations, Forward Funding, and Advance Funding: Concepts, Practice, and Budget Process Considerations

This report discusses the federal programs that are funded through the annual appropriations process in regular appropriations acts, which may typically obligate those funds during a period that starts at the beginning of that fiscal year.

Apr 16, 2014

NATO: Response to the Crisis in Ukraine and Security Concerns in Central and Eastern Europe

This report addresses the North Atlantic Treaty Organization (NATO) and U.S. military responses to the crisis in Ukraine. It does not discuss political, economic, or energy policy responses.

Apr 16, 2014

Federal Reserve: Oversight and Disclosure Issues

The report discusses recently-enacted legislation and legislation introduced in the 113th Congress related to the Federal Reserve (Fed). It also provides information about the potential impact of greater oversight and disclosure on the Fed's independence and its ability to achieve its macroeconomic and financial stability goals.

Apr 15, 2014

Returning to Full Employment: What Do the Indicators Tell Us?

Until recently, the economy and labor market were experiencing an unusually slow recovery from the longest and deepest recession since the Great Depression compared to other expansions since World War II. The rapid decline in the unemployment rate from 7.9% in January to 6.7% in December 2013 (where it remained in the first quarter of 2014) would seem to indicate that the labor market is returning to normal. The current unemployment rate is only 0.5 to 1.5 percentage points higher than the consensus range of full employment. Unusually, the unemployment rate may not currently be a good proxy for the overall state of the labor market or economy. Some of the decline in the unemployment rate in 2013 is attributable to a recovery in employment, but some is attributable to workers dropping out of the labor force. The labor force participation rate has continued to fall during the recovery and is at its lowest level since the 1970s. In fact, it has fallen more in the past five years than at any time since data have been collected. Studies have identified multiple reasons for the decline. Some workers have left the labor force because they have become discouraged and given up on seeking employment. Others have left for reasons stemming from long-term trends that are unrelated to the recession, such as age or enrollment in school or training. This trend could reversefor example, more workers returned to the labor force than found jobs in the first quarter of 2014, which prevented the unemployment rate from falling. Other evidence also points to more slack in the economy than the headline unemployment rate suggests. Economic output and employment have grown since mid-2009 and 2010, respectively, but at relatively sluggish rates. The long-term unemployment rate and youth unemployment rates have fallen only modestly since the recession ended and are still at historically high levels. Inflation has remained slightly lower than the Federal Reserves (Feds) goal of 2%. These other economic indicators could be sending a misleading signal about significant slack in the economy, however, if the economys potential capacity has been eroded by structural changes or by the length and depth of the Great Recession. Cyclical deterioration in the U.S. labor market is usually considered temporaryrecessions are thought to have no lasting effect on overall employment and unemployment rates. This recession could cause a departure from conventional wisdom if labor market problems that started as cyclical persisted so long that they became structural. For example, long-term unemployment could have caused workers skills to erode, which would then prevent them from finding a job when the economy recovered. Congress conducts fiscal policy and oversees the Feds implementation of monetary policy, the two tools of macroeconomic stabilization. Policy makers are grappling with the transition from the highly expansionary monetary and fiscal policy put in place during the Great Recession. Many economists advocate reducing the budget deficit only when the economy is at or near full employment. Likewise, the Fed has stated that it would begin to raise interest rates once the economy is near full employment. If the economy remains far from full employment, then declining unemployment would not yet call for a tightening of monetary and fiscal policy. Alternatively, if lower unemployment is being driven by a cyclical upswing and the economy is now closer to full employment than historical experience would predict, policy would likely need to be tightened sooner in order to avoid rising inflation. It would also suggest that structural policies (e.g., those that increase the incentives to hire, seek work, delay retirement, or train) would be more effective at improving labor market conditions than counter-cyclical monetary and fiscal policies.

Apr 15, 2014

Implementing the Affordable Care Act: Delays, Extensions, and Other Actions Taken by the Administration

This report discusses the health care reform, private health insurance provisions and the implementation of the Affordable Care Act (ACA).

Apr 14, 2014

Trade Africa Initiative

Apr 10, 2014

Congressional Adoption of Vine

Apr 10, 2014

Concurrent Receipt of Social Security Disability Insurance (SSDI) and Unemployment Insurance (UI): Background and Legislative Proposals in the 113th Congress

Apr 9, 2014

The Renewable Electricity Production Tax Credit: In Brief

This report provides a brief overview of the renewable electricity production tax credit (PTC). The first section of the report describes the credit. The second section provides a legislative history. The third section presents data on PTC claims and discusses the revenue consequences of the credit. The fourth section briefly considers some of the economic and policy considerations related to the credit. The report concludes by briefly noting policy options related to the PTC.

Apr 7, 2014

Federal Aid to State and Local Governments: Select Issues Raised by a Federal Government Shutdown

At the end of the day on September 30, 2013, appropriations provided under the Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6) expired. Beginning on October 1, 2013, the first day of FY2014, this resulted in a partial federal government shutdown due to a lapse in appropriations. On October 17, 2013, the Continuing Appropriations Act (P.L. 113-46) was signed into law and provided funding through January 15, 2014. Funding for the remainder of the fiscal year was provided when the Consolidated Appropriations Act (P.L. 113-76) was signed into law on January 17, 2014. During the October 2013 lapse in appropriations, federal agencies were directed to implement contingency plans that were designed to guide federal agency operations during the partial government shutdown. Notably, federal agency operations include administration of over 1,714 congressionally authorized federal grant programs administered by 26 federal agencies. Federal outlays for grants to state and local governments were $514.6 billion in FY2011 and an estimated $504.4 billion in FY2012. The largest outlays for grants to state and local governments are for health programs with an estimated outlay of $275 billion in FY2012, and education, training, employment, and social services with an estimated outlay of $115 billion for the same year. State and local governments rely upon federal aid to fund projects and provide services that benefit communities and individuals. Interruptions in these activities can have a negative effect on the beneficiaries of federal aid. These activities rely upon the following grant administration activities: Executing grant award agreements; Processing payments to grantees; and Investigating waste, fraud, and abuse allegations. A federal government shutdown may cause a minor disruption or may result in the cessation of these activities depending on the following factors: The timing and length of the federal government shutdown; Choices made by federal, state, and local officials; and Congressional action since the last federal government shutdown. Federal, state, and local officials make choices involving: Covering gaps in federal funding with uncertainty of reimbursement; Furloughing grants administration personnel; and Including grants administration personnel in contingency planning. The administrative, political, and economic environment will vary in every potential and actual federal government shutdown. Predicting the effect of a federal government shutdown on federal grant recipients and beneficiaries relies upon evaluation of these factors at the time of the lapse in federal funding and consideration of Congressional action since the last shutdown. This report will evaluate these factors and present a selection of legislative options to mitigate the effect of a future federal government shutdown.

Apr 7, 2014

U.S. Travel and Tourism: Industry Trends and Policy Issues for Congress

This report discusses the travel and tourism industry, which is an amalgam of business activities including transportation, lodging, entertainment, meals, and retail trade.

Apr 2, 2014

Overview of Constitutional Challenges to NSA Collection Activities and Recent Developments

This report focuses on two main National Security Agency (NSA) collection activities approved by the Foreign Intelligence Surveillance Court (FISC) established under the Foreign Intelligence Surveillance Act (FISA) of 1978. The first is the bulk collection of telephony metadata for domestic and international telephone calls. The second involves the interception of Internet-based communications and is targeted at foreigners who are not within the United States, but may also inadvertently acquire the communications of U.S. persons.

Apr 1, 2014

Contractor Fraud Against the Federal Government: Selected Federal Civil Remedies

Because the federal government relies heavily on contractors to supply it with goods and services, fraud by these contractors potentially costs the government billions of dollars annually. Detecting, prosecuting, and deterring contractor fraud poses a challenge to federal agencies, which often possess limited resources. To combat contractor fraud, Congress has enacted several statutes that allow the federal government—and in some instances, private parties—to recover damages, civil penalties, or forfeitures against parties that make false or fraudulent claims for payment or engage in other misconduct. These statutes may impose civil liability for conduct that does not amount to fraud under traditional common law definitions and potentially allow for significant recoveries. Generally, the False Claims Act (FCA) authorizes the Attorney General, as well as certain private parties, to bring a civil action against “any person” who makes a false claim for payment from the government. Recently, some courts have held that claims for payment that are not explicitly false may become false by implication because of a party’s actions or omissions prior to contract formation or during contract performance. However, some of these same courts have expressed concerns that such theories could lead to liability for ordinary breaches of contract or insignificant regulatory violations, and have thus imposed limitations on their use by the government or private parties that sue on behalf of the government. Other recent regulatory and judicial developments may also affect contractors’ potential exposure to civil liability and damages under the FCA. The Contract Disputes Act (CDA) sets forth procedures for the resolution of claims and disputes involving certain contracts awarded by executive agencies. The CDA contains an anti-fraud remedy because of concerns that contractors would submit inflated claims during contract disputes as a “negotiating tactic,” leading the government to settle these claims instead of using its limited resources to evaluate them on the merits. The Federal Circuit’s notable decision in Daewoo Engineering Co., Ltd. v. United States demonstrates that the CDA’s anti-fraud provision may result in a significant civil penalty for a contractor that submits a fraudulent claim to the government in an effort to extract a settlement offer. Under the Forfeiture of Fraudulent Claims Act (FFCA), a contractor that brings a fraudulent contract claim against the government in the Court of Federal Claims (COFC) may have to forfeit all of its claims under the contract. Courts disagree over whether fraud sufficient for forfeiture may relate to the execution or performance of the contract in addition to submission of a claim. The Program Fraud Civil Remedies Act (PFCRA) provides an administrative process under which certain federal agencies may impose civil remedies or assessments on “persons” who knowingly make false, fraudulent, or fictitious claims or statements to the agencies in “small-dollar cases” of fraud that the Department of Justice (DOJ) declines to pursue in court. Few federal agencies use the PFCRA, leading some to recommend that, among other things, Congress raise the act’s jurisdictional cap and civil penalty limit; allow agencies to retain recovered funds; and simplify the act’s procedural requirements. Congress is perennially interested in the scope of federal civil fraud remedy statutes. In order to be effective, these statutes must be broad enough to punish and deter fraud that often evades detection, wastes taxpayer funds, and negatively impacts government programs. On the other hand, if courts interpret a fraud statute so broadly that it imposes civil liability on contractors for minor regulatory violations or ordinary breaches of contract, contractors may decline to compete for government contracts, potentially leading to higher prices for the government.

Apr 1, 2014

Sanitary and Phytosanitary (SPS) and Related Non-Tariff Barriers to Agricultural Trade

Sanitary and phytosanitary (SPS) measures are the laws, rules, standards, and procedures that governments employ to protect humans, animals, and plants from diseases, pests, toxins, and other contaminants. Examples include meat and poultry processing standards to reduce pathogens, residue limits for pesticides in foods, and regulation of agricultural biotechnology. Technical barriers to trade (TBT) cover technical regulations, product standards, environmental regulations, and voluntary procedures relating to human health and animal welfare. Examples include trademarks and patents, labeling and packaging requirements, certification and inspection procedures, product specifications, and marketing of biotechnology. SPS and TBT measures both comprise a group of widely divergent standards and standards-based measures that countries use to regulate markets, protect their consumers, and preserve natural resources. According to the World Trade Organization (WTO), SPS and TBT measures have become more prominent concerns for agricultural exporters and policy makers, as tariff-related barriers to trade have been reduced by various multilateral, regional, and bilateral negotiations and trade agreements. The concerns include whether SPS and TBT measures might be used to unfairly discriminate against imported products or create unnecessary obstacles to trade in agricultural, food, and other traded goods. Notable U.S. trade disputes involving SPS and TBT measures have included a European Union (EU) ban on U.S. meats treated with growth-promoting hormones and also certain pathogen reduction treatments, and an EU moratorium on approvals of biotechnology products, among other types of trade concerns with other countries. Foreign countries have also objected to various U.S. trade measures. Multilateral trade rules allow governments to adopt measures to protect human, animal, or plant life or health, provided such measures do not discriminate or use them as disguised protectionism. This principle was clarified in the mid-1990s by WTO members’ approval of the Agreement on the Application of Sanitary and Phytosanitary Measures (“SPS Agreement”). The SPS Agreement sets out the basic rules for ensuring that each country’s food safety and animal and plant health laws and regulations are transparent, scientifically defensible, and fair. Similarly, in the late 1970s, the Agreement on Technical Barriers to Trade (“TBT Agreement”) addressed the use of technical requirements and voluntary standards for a range of traded goods. In addition, the United States has entered into, or is currently negotiating, numerous regional and bilateral free trade agreements (FTAs) that contain SPS and TBT language. In an effort to resolve perceived intractable trade problems regarding SPS and TBT matters, many in U.S. agriculture and the food industry are supporting efforts to build on and go beyond rules, rights, and obligations in the SPS Agreement and TBT Agreement, as well as beyond commitments in existing U.S. FTAs. The U.S. meat and poultry industry initially proposed efforts to adopt tougher WTO rules for animal health regulations as part of the ongoing Trans-Pacific Partnership (TPP) negotiations. These concepts were later reinforced by recommendations from U.S. and EU trade officials involved in the ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations. These efforts are referred to as WTO-Plus rules, SPS-Plus, and TBT-Plus rules. In Congress, which must approve legislation if a trade agreement is to be implemented, many Members are interested in how a trade agreement might address SPS and TBT matters. Many remain concerned that countries are turning to non-tariff measures, such as SPS and TBT measures, to protect their farmers from import competition. U.S. rights and obligations regarding SPS and TBT measures are also relevant to regulations affecting imported food.

Mar 31, 2014

Tort Suits Against Federal Contractors: Selected Legal Issues

Contractors have played a considerable role in U.S. military operations over the last decade, and some commentators anticipate they will continue to do so in the future. Due in part to their heavy involvement in military operations, contractors have faced numerous tort suits, or suits seeking remedy for civil wrongs, in recent years. Many of these tort suits have alleged that contractors negligence, or failure to take due care, in performing contractual obligations has caused harms to third/private parties (as opposed to the contracting agency). Contractors have often responded to such suits by raising the Federal Tort Claims Act (FTCA), the political question doctrine, and derivative immunities in seeking to avoid liability. They may also, to the extent permitted by their contract, seek indemnification from the government if found liable. The Supremacy Clause of the U.S. Constitution provides that federal law is the supreme law of the land and preempts, or applies instead of, inconsistent provisions of state law. The FTCA is a federal law through which the government largely waives its inherent sovereign immunity from tort liability, although it retains sovereign immunity if one of the FTCAs exceptions applies (e.g., against any claim arising in a foreign country). Although the FTCA does not apply directly to federal contractors, they have long argued that the FTCAs exceptions can preempt state tort law claims against them in addition to federal agencies, and the Supreme Court agreed in its 1988 decision in Boyle v. United Technologies Corporation. There, the Court held that failure to find that one such FTCA exception, the discretionary function exception, preempts state law tort claims against contractors in narrowly prescribed circumstances would frustrate the exceptions underlying purpose of shielding the government from liability caused by its discretionary decisions. The Court thus fashioned a rule immunizing contractors from tort liability caused by defects in some government-selected designs. Lower courts subsequently grappled with questions regarding the Boyle rules scope (e.g., does it protect against manufacturing defect claims?), as well as whether the FTCAs combatant activities exception immunity may be extended to contractors under the Boyle Courts rationale. Based largely on the terms and performance of particular contracts, some courts extended the combatant activities exception to contractors, whereas others did not. Contractors have also asserted that the political question doctrinewhich recognizes limitations on justiciability, or the appropriateness of a court hearing a claimbars particular tort suits against them because determining whether they are liable would require the court to decide questions that the Constitution commits to the legislative or executive branches of government. Though the outcomes in such cases have varied, it would appear that courts may be more likely to find a political question when a case presents certain characteristics. In addition, contractors have argued for immunities deriving from federal employees absolute immunity under the Westfall Act, pursuant to which they cannot be liable for any harms that occur within the scope of their employment. Contractors have also argued that the judicially created Feres doctrine, which provides that the government cannot be liable to servicemembers for torts arising in the course of, or incidental to, military service, should apply to them. Some courts have recognized a derivative absolute immunity for contractors, but have held that it applies only to harms caused by contractors performance of discretionary, rather than ministerial, functions. Courts have generally rejected contractors derivative Feres immunity arguments. In some cases, the government may also have agreed to indemnify a contractor, or promised to pay certain liabilities to third parties that the contractor may incur through contract performance.

Mar 31, 2014

Mixed-Oxide Fuel Fabrication Plant and Plutonium Disposition: Management and Policy Issues

This report discusses the control of surplus nuclear weapons material that became an urgent U.S. foreign policy goal with the end of the Cold War and breakup of the Soviet Union in the early 1990s.

Mar 28, 2014

Unlawfully Present Aliens, Driver's Licenses, and Other State-Issued ID: Select Legal Issues

This report provides an overview of key legal issues raised by state laws regarding the denial or issuance of driver's licenses and other forms of ID to unlawfully present aliens, as well as by state and local approaches to recognizing foreign-issued ID documents.

Mar 28, 2014

Farm Commodity Provisions in the 2014 Farm Bill (P.L. 113-79)

Congressional Research Service 7-5700 www.crs.gov R43448 Summary The farm commodity program provisions in Title I of the Agricultural Act of 2014 (P.L. 113-79, the 2014 farm bill) include three types of support for crop years 2014-2018: Price Loss Coverage (PLC) payments, which are triggered when the national average farm price for a covered commodity (e.g., wheat, corn, soybeans, rice, and peanuts) is below its statutorily fixed “reference price”; Agriculture Risk Coverage (ARC) payments, as an alternative to PLC, which are triggered when crop revenue is below its guaranteed level based on a multi-year moving average of historical crop revenue; and Marketing Assistance Loans (MALs), which offer interim financing for the loan commodities (covered crops plus several others) and, if prices fall below loan rates set in statute, additional low-price protection, sometimes paid as loan deficiency payments (LDPs). The enacted 2014 farm bill eliminated “direct payments,” which were provided annually to producers and landowners of covered commodities from 1996 to 2013 based on historical production and a fixed payment rate set in statute. All farm program support now consists of variable payments. The PLC and ARC programs are enhanced relative to their predecessors via higher reference prices for PLC and more “local” coverage for ARC (whereby payments are triggered by county or individual losses rather than at the state level). In a major departure from previous farm bills and in response to a trade dispute with Brazil, upland cotton is no longer a covered commodity, with support for that crop now provided by a new crop insurance policy called the Stacked Income Protection Plan (STAX). Approximately three-fourths of the 10-year, $47 billion in savings associated with the elimination of 2008 farm bill commodity programs was used to offset the costs of revising the overall farm safety net, specifically farm programs in Title I of the 2014 farm bill, adding permanent disaster assistance (also in Title I), enhancing the permanently authorized federal crop insurance program (Title XI), and enhancing the Noninsured Crop Disaster Assistance Program or NAP (Title XII). Crop insurance is available for more than 100 crops, including fruits and vegetables, and is designed primarily to cover losses from natural disasters. Farm programs do not require a participation fee, while crop insurance requires participating farmers to pay part of program costs. The enacted 2014 farm bill sets a $125,000 per person cap on the total of PLC, ARC, marketing loan gains and loan deficiency payments. The limit applies to the total from all covered commodities except peanuts, which has a separate $125,000 limit. Also, to be eligible for payments, persons must be “actively engaged” in farming. The 2014 farm bill instructs USDA to write regulations (beginning with the 2015 crop year) that define “significant contribution of active personal management” to more clearly and objectively implement existing law. A single, total adjusted gross income (AGI) limit for payment eligibility is established at $900,000, which is less than the sum of the two separate limits (farm and non-farm) in the 2008 farm bill. The Congressional Budget Office cost estimate (score) of the Title I provisions represents five-year savings of $6.3 billion and 10-year savings of $14.3 billion (both relative to baseline projections made in May 2013 assuming continuation of the 2008 farm bill). If these scores are added to the 2013 CBO baseline of budget outlays used to write the farm bill, then CBO’s estimated cost of Title I is $23.6 billion for FY2014-2018 and $44.5 billion over 10 years. Contents Introduction 1 Background 1 Policy Rationale for Farm Subsidies 1 Authorizing Legislation 2 Eligible Commodities 2 Definition of “Farm” 3 Base Acres 3 “Partially Decoupled” Payments 4 Eligible Producers 4 Eliminated 2008 Farm Bill Programs 5 Farm Commodity Program Provisions 5 Price Loss Coverage (PLC) 6 Agriculture Risk Coverage (ARC) 9 County ARC 9 Individual ARC 9 Marketing Assistance Loan Program 10 Cotton Not Eligible for Either PLC or ARC 11 Planting Fruits and Vegetables on Base Acres 12 Payment Limits 12 “Actively Engaged” 12 Adjusted Gross Income (AGI) Limit 13 Interaction with Federal Crop Insurance 13 Estimated Cost of the Commodity Title 13 Implementation 15 Figures Figure 1. Price Loss Coverage (PLC) 8 Figure 2. Price Loss Coverage (PLC): Low Price Scenario for Rice 8 Figure 3. Agriculture Risk Coverage (ARC)–County Coverage 10 Figure 4. Agriculture Risk Coverage (ARC)–Low Revenue Scenario for Corn 10 Figure 5. Outlays for Farm Commodity Program and Disaster Assistance 14 Tables Table 1. Loan Rates and Reference Prices in the 2014 Farm Bill 7 Table 2. Cost of Provisions in the Commodity Title of the 2014 Farm Bill 14 Appendixes Appendix. Major Farm Commodity Provisions in the Enacted 2014 Farm Bill 17 Contacts Author Contact Information 32 Acknowledgments 32 Introduction On February 7, 2014, President Obama signed into law a new five-year omnibus farm bill, the Agricultural Act of 2014 (H.R. 2642; P.L. 113-79, the 2014 farm bill). The House had voted, 251-166, to approve the conference report (H.Rept. 113-333) on January 29, 2014, and the Senate approved the conference report on February 4, 2014, by a vote of 68-32. The U.S. Department of Agriculture (USDA) is now implementing the provisions, most of which take effect this year. This report describes the farm commodity programs in Title I of the 2014 farm bill for “covered commodities” such as wheat, corn, soybeans, rice, and peanuts. Producer support is provided for the 2014-2018 crop years primarily through either statutory (“reference”) prices or historical revenue guarantees based on the five most recent years of crop prices and yields. Important policy developments in the new law are also discussed and compared to prior law. The most significant policy change for commodity programs in the 2014 farm bill was the elimination of fixed direct payments and the enhancement of variable payments to farmers and landowners when crop prices or revenue declines. Table A-1 provides detailed descriptions of farm commodity program provisions compared with prior law. For more on the legislative history of the 2014 farm bill and a side-by-side summary of crop insurance and all other farm bill provisions, see CRS Report R43076, The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side. Background Policy Rationale for Farm Subsidies Federal farm support began in the 1930s through Depression-era efforts to raise farm household income when commodity prices were low because of prolonged weak consumer demand. While initially intended to be a temporary effort, the commodity support programs survived, but have been modified away from supply control and management of commodity stocks (which was designed to prop up prices) into direct income support payments. The 2014 farm bill continues traditional farm support via variable payments relative to statutory price levels or historical crop revenue. Proponents of farm commodity programs argue that federal involvement in the sector is needed to stabilize and support farm incomes by shifting some of the risks to the federal government. These risks include short-term market price instability and longer-term capacity adjustments. Proponents see the goal of farm policy as maintaining the economic health of the nation’s farm sector so that it can use its comparative advantage in feeding the nation and competing in the global market for food and fiber. Critics argue that farm commodity programs waste taxpayer dollars, distort production of certain crops, capitalize benefits to the owners of the resources, encourage concentration of production, and comparatively harm smaller domestic producers and farmers in lower-income foreign nations. Authorizing Legislation The authority for USDA to operate farm commodity programs comes from three permanent laws, as amended: the Agricultural Adjustment Act of 1938 (P.L. 75-430), the Agricultural Act of 1949 (P.L. 81-439), and the Commodity Credit Corporation (CCC) Charter Act of 1948 (P.L. 80-806). Congress typically alters these laws through multi-year omnibus farm bills to address current market conditions, budget constraints, or other concerns. If a new farm bill is not enacted when an old one expires, farm programs would revert to the permanent laws mentioned above for most of the major program crops. Under permanent law, eligible commodities would be supported at levels much higher than they are now, and many of the currently supported commodities might not be eligible. Since reverting to permanent law is incompatible with current national economic objectives, global trading rules, and federal budgetary policies, pressure builds at the end of one farm bill to enact another. The 2014 farm bill (P.L. 113-79) contains the most recent version of the farm commodity support programs. It supersedes the commodity provisions of previous farm bills, and suspends the relevant price support provisions of permanent law. Eligible Commodities Federal support exists for about two dozen farm commodities representing about one-third of gross farm sales. During FY2005-FY2014, five crops (corn, cotton, wheat, rice, and soybeans) accounted for about 90% of these payments. Under the 2014 farm bill, the “covered commodities” are the primary crops eligible for farm support: wheat, oats, and barley (including wheat, oats, and barley used for haying and grazing); corn, grain sorghum, long grain rice, medium grain rice, and pulse crops (dry peas, lentils, small chickpeas, and large chickpeas); soybeans, other oilseeds (including sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe, and sesame seed), and peanuts. In a major departure from all previous farm bills and in response to a trade dispute with Brazil, upland cotton is no longer a covered crop, with support for that crop now provided by a new crop insurance policy called the Stacked Income Protection Plan (STAX). “Loan commodities” include all of the “covered commodities” plus upland cotton, extra long staple cotton, wool, mohair, and honey. These commodities are eligible for the marketing loan program only. The 2014 farm bill replaces the dairy product price support program and Milk Income Loss Contract (MILC) payments with new dairy programs to (1) protect producer margins (milk prices minus feed costs), and (2) buy excess dairy products to boost demand when margins drop below certain levels. Sugar support is indirect through import quotas, price guarantees, and domestic marketing allotments. No direct payments are made to growers and processors. There was no change to the sugar program in the 2014 farm bill. See CRS Report R42551, Sugar Provisions of the 2014 Farm Bill (P.L. 113-79). Meats, poultry, fruits, vegetables, nuts, hay, and nursery products (about two-thirds of farm sales) do not receive direct support or payments under the commodity programs of the farm bill. However, livestock and tree fruit producers receive disaster support under Title I of the 2014 farm bill. (See Table A-1 and CRS Report RS21212, Agricultural Disaster Assistance, for a description of disaster programs.) Also, under the permanently authorized federal crop insurance program, subsidized crop insurance is available for more than 100 crops, including fruits and vegetables which are not supported by farm programs. Crop insurance is designed primarily to cover losses from natural disasters and within-season price or revenue declines (see CRS Report R40532, Federal Crop Insurance: Background). Definition of “Farm” The definition of “farm” used to administer the commodity programs is different from other statistical or perceived definitions of farms. Under Farm Service Agency (FSA) regulations, a “farm” for program payment purposes is one or more tracts of land considered to be a separate operation. Land in a farm does not need to be contiguous; however, all tracts within a farm must have the same operator and the same owner (unless all owners agree to combine multiple tracts into a single FSA farm). Thus, one producer may be operating several “farms” if he/she is renting land from several landlords, or has purchased land in several tracts. Base Acres For the purpose of calculating program payments, the term “base acres” is the historical planted acreage on each FSA farm, using a multi-year average from as far back as the 1980s. Technically, a farm’s base with respect to a covered commodity is the number of acres in effect under the 2008 farm bill (7 U.S.C. 8702, 8751) as of September 30, 2013, subject to any reallocation, adjustment, or reduction under the 2014 farm bill. Base is calculated for each covered commodity and transfers to the new owner when land is sold, making the new landowner eligible for farm programs. Because a farmer’s actual plantings may differ from farm base acres, program payments may not necessarily align with financial losses associated with market prices or crop revenue. In order to better match program payments with farm risk, the 2014 farm bill provides farmers with a one-time opportunity to update individual crop base acres by reallocating acreage within their current base to match their actual crop mix (plantings) during 2009-2012. Farmers can also choose to not reallocate their base if they expect payments to be maximized under their current base. In the case of cotton, which is no longer a covered commodity, former cotton base acres are renamed “generic base” and added to a producer’s base for potential payments if a covered crop is planted on the farm. “Partially Decoupled” Payments Payments under the new programs in the 2014 farm bill are made on base acres, not current plantings. This feature—decoupling payments from current plantings—is intended to better comply with World Trade Organization (WTO) rules on domestic support and to minimize any influence on producer behavior and prevent any subsequent market distortion. The payments are considered “partially decoupled” because the payment amount remains connected to current market prices. In the 2008 farm bill, farm payments were calculated using either base or planted area, depending upon the program. Eligible Producers The 2014 farm bill defines a producer (for purposes of farm program benefits) as an owner-operator, landlord, tenant, or sharecropper that shares in the risk of producing a crop and is entitled to a share of the crop produced on the farm. For payment eligibility, a term commonly used in federal regulations is “actively engaged in farming,” which generally means providing significant contributions of capital (land or equipment) and labor and/or management, and receiving a share of the crop as compensation. The 2014 farm bill requires USDA to write new regulations that define “significant contribution of active personal management.” See “Payment Limits,” below. Producers do not pay to participate in farm programs. However, an individual must comply with certain conservation and planting flexibility rules. Conservation rules include protecting wetlands, preventing erosion, and controlling weeds. Planting flexibility rules allow crops other than the program crop to be grown, but under the 2014 farm bill, eligible payment acreage is reduced when fruits, vegetables, or wild rice are planted in excess of 15% of base acres (or 35% depending upon a farmer’s program choice discussed below). Also, a producer on a farm may not receive farm program payments if the sum of the base acres on the farm is 10 acres or less. A farm enterprise usually involves some combination of owned and rented land. Two types of rental arrangements are common: cash rent and share rent. Under cash rental contracts, the tenant pays a fixed cash rent to the landlord. The landlord receives the same rent, bears no risk in production, and thus is not eligible to receive program payments. The tenant bears all of the risk, takes all of the harvest, and receives all of the government subsidy. Under share rental contracts, the tenant usually supplies most or all of the labor and machinery, while the landlord supplies land and perhaps some machinery or management. Both the landlord and the tenant bear risk in producing a crop and receive a portion of the harvest. Both are eligible to share in the government subsidy. Even though tenants might receive all of the government payments under cash rent arrangements, they might not keep all of the benefits if landlords demand higher rent. Economists widely agree that a large portion of government farm payments passes through to landlords, since government payments boost the rental value of land. The amount of total land in farms rented by farm operators has ranged between 34% and 43% of farmland during 1964-2007. Eliminated 2008 Farm Bill Programs Under the enacted 2014 farm bill (P.L. 113-79), farm support for traditional program crops is restructured by eliminating the direct payment (DP) and counter-cyclical payment (CCP) programs, and the Average Crop Revenue Election (ACRE) program. For the 1996 through 2013 crop years, direct payments were made to producers and landowners based on historical production of corn, wheat, soybeans, cotton, rice, peanuts, and other “covered” crops. Direct payments lost political support in recent years because recipients did not need to suffer an income loss in order to receive a payment. Approximately three-fourths of the 10-year, $47 billion in savings associated with the elimination of current farm programs was used to offset the costs of revising farm programs in Title I of the 2014 farm bill, adding permanent disaster assistance (also in Title I), enhancing the permanently-authorized federal crop insurance program (Title XI), and enhancing the Noninsured Crop Disaster Assistance Program or NAP (Title XII). Farm Commodity Program Provisions The farm commodity program provisions in Title I of the 2014 farm bill include three types of support for crop years 2014-2018: Price Loss Coverage (PLC) payments, which are triggered when the national average farm price for a covered commodity is below its statutorily-fixed “reference price”; Agriculture Risk Coverage (ARC) payments, as an alternative to PLC, which are triggered when crop revenue is below its guaranteed level based on a multi-year moving average of historical crop revenue; and Marketing Assistance Loans (MALs) that offer interim financing for the loan commodities (covered crops plus several others as indicated above) and, if prices fall below loan rates set in statute, additional low-price protection, sometimes paid as loan deficiency payments (LDPs). Farmers with base acres of covered commodities have a one-time irrevocable decision to choose between PLC and “county” ARC (based on a county guarantee) on a commodity-by-commodity basis for each farm. Alternatively, all covered crops on a farm can be enrolled in “individual” ARC, which is based on a farm-level guarantee. (See “Agriculture Risk Coverage (ARC),” below.) If no choice is made, the producer forfeits any payments for the 2014 crop year and the farm is enrolled automatically in PLC for the 2015-2018 crop years. The “optimal” decision depends in part on expected prices through 2018 relative to guarantees in each program. The PLC and ARC programs are similar conceptually to the 2008 farm bill’s counter-cyclical payment (CCP) program and Average Crop Revenue Election (ACRE) program, respectively. However, compared with the previous programs, they have enhanced levels of protection from low prices (i.e., higher price parameters in PLC) or revenue loss (i.e., county- or farm-level guarantees for ARC rather than state-level in ACRE). PLC and ARC payments are proportional to base acres, and not planted acres. Payments are made with a lag of approximately one year as annual price and yield data are compiled for USDA’s calculations. USDA is to issue payments beginning October 1 after the end of each marketing year, which varies by crop. For example, the marketing year for corn harvested in fall of 2014 ends in August 2015. Marketing assistance loans are available for covered crops and other loan commodities. The program continues mostly unchanged from the 2008 farm bill, with loan rates set at relatively low levels compared to historical prices. All three types of payments are subject to a combined payment limit of $125,000 per person. Also, the income limit for program eligibility is $900,000 for adjusted gross income (three-year average). See “Payment Limits” and “Adjusted Gross Income (AGI) Limit,” below. Price Loss Coverage (PLC) For each covered commodity on a farm, producers may select the Price Loss Coverage (PLC) program to receive a payment on 85% of base acres when the annual national average farm price is below the reference price set in statute. This option could be attractive if farmers expect farm prices to drop below statutory minimums. Payments are proportional to a farm’s base acres, historical farm yield, and the difference between the reference price and the annual farm price. Hence payments are generally “decoupled” from planted acreage and actual yield but not price. PLC payments operate the same as CCPs under the 2008 farm bill, which have been reported to the WTO by the United States as “amber box” subsidies, and thus limited in size together with other amber box subsidies. Commodity groups successfully argued for an increase in reference prices relative to the payment trigger levels in the 2008 farm bill (i.e., target price minus direct payment rate). For example, the payment trigger level has been raised by 51% for wheat, 57% for corn, 51% for soybeans, 72% for rice (98% for temperate Japonica rice), and 17% for peanuts. Reference prices and a comparison with 2008 farm bill parameters for each covered commodity are shown in Table 1. The PLC payment formula is 85% times the number of base acres times historical payment yield times the difference between the reference price and the annual farm price (or loan rate if higher). See Figure 1 for a graphical interpretation of the formula and Figure 2 for a hypothetical example for rice. The historical payment yield is equal to 90% of the 2008-2012 average yield per planted acre for the farm. As an alternative, the producer can keep the program yield used for calculating CCPs in the 2008 farm bill (generally based on 1998-2001 yields). Table 1. Loan Rates and Reference Prices in the 2014 Farm Bill Price at which a payment is triggered: 2008 and 2014 farm bills Loan Rate 2008 farm bill Target Price minus Direct Payment Rate 2014 farm bill Reference Price % change from 2008 farm bill Wheat, $/bu 2.94 4.17 – 0.52 = 3.65 5.50 +51% Corn, $/bu 1.95 2.63 – 0.28 = 2.35 3.70 +57% Sorghum, $/bu 1.95 2.63 – 0.35 = 2.28 3.95 +73% Barley, $/bu 1.95 2.63 – 0.24 = 2.39 4.95 +107% Oats, $/bu 1.39 1.79 – 0.024 = 1.766 2.40 +36% Upland Cotton, $/lb 2008 farm bill: 0.52 2014 farm bill: 0.45 to 0.52 0.7125 – 0.0667 = 0.6458 n.a. n.a. ELS cotton, $/lb 0.7977 n.a. n.a. n.a. Rice, $/cwt 6.50 10.50 – 2.35 = 8.15 14.00; 16.10 for temperate japonica +72%; +98% for temperate japonica Soybeans, $/bu 5.00 6 – 0.44 = 5.56 8.40 +51% Minor oilseeds, $/lb 0.1009 0.1268 – 0.008 = 0.1188 0.2015 +70% Peanuts, $/ton 355 495-36 = 459 535 +17% Peas, dry, $/cwt 5.40 8.32 – 0 = 8.32 11.00 +32% Lentils, $/cwt 11.28 12.81 – 0 = 12.81 19.97 +56% Sm.chickpeas, $/cwt 7.43 10.36 – 0 = 10.36 19.04 +84% Lg.chickpeas, $/cwt 11.28 12.81 – 0 = 12.81 21.54 +68% Wool, graded, $/lb 1.15 n.a. n.a. n.a. Wool, nongraded 0.40 n.a. n.a. n.a. Mohair $/lb 4.20 n.a. n.a. n.a. Honey, $/lb 0.69 n.a. n.a. n.a. Sugar, raw cane, $/lb 0.1875 n.a. n.a. n.a. Sugar, beet, $/lb 0.2409 n.a. n.a. n.a. Source: CRS. Note: n.a. = not applicable. Figure 1. Price Loss Coverage (PLC) (makes payment when national average farm price drops below the reference price) Source: CRS. Note: In a declining market, the per-bushel payment rate increases until the farm price drops below the loan rate. At this point, benefits under the Marketing Assistance Loan Program may become available. Figure 2. Price Loss Coverage (PLC): Low Price Scenario for Rice Source: CRS. Notes: In a declining market, the per-bushel payment rate increases until the farm price drops below the loan rate ($6.50/cwt. for rice). If market prices decline further, benefits under the Marketing Assistance Loan Program may become available. Agriculture Risk Coverage (ARC) Producers more concerned about declines in crop revenue (i.e., yield times price) than just price can select the county Agriculture Risk Coverage (ARC) program as an alternative to PLC for each covered commodity. Payments are made on 85% of base acres when annual crop revenue is less than 86% of its historical level. If farmers prefer individual farm level protection, they must enroll all covered crops on the farm in the ARC-individual coverage option instead of selecting between PLC and county ARC for each crop. County ARC For producers choosing between ARC and PLC on each covered commodity on a farm, the county ARC program has a county revenue guarantee, and only a crop revenue loss at the county level triggers a payment. For ARC county coverage, payments are made on 85% of base acres when actual county crop revenue drops below the county revenue guarantee, which is 86% of historical or “benchmark” revenue. The benchmark revenue per acre is equal to the average historical county yield for the most recent 5 crop years (excluding the years with the highest and lowest yields, or “Olympic average”) times the national average market price received by producers during the 12-month marketing year for the most recent 5 crop years (excluding the years with the highest and lowest prices). With the guarantee set at 86%, the producer absorbs the first 14% of the shortfall, and the government absorbs the next 10% of revenue shortfall. (The per-acre payment rate is capped at 10% of benchmark revenue.) Remaining losses are backstopped by crop insurance if purchased at sufficient coverage levels by the producer and by the marketing assistance loan program. The county ARC payment formula is 85% times the number of base acres times the difference between the county revenue guarantee and the actual crop revenue. See Figure 3 for a graphical interpretation of the formula and Figure 4 for a hypothetical example for corn. Individual ARC Farm level protection is provided if producers enroll all covered crops on the farm in the ARC-individual coverage option, which uses individual farm yields for each covered crop (which are more variable than county averages) and aggregates all crop revenue into a single, whole-farm guarantee. Individual coverage was not available for ACRE in the 2008 farm bill; farm-level coverage was provided instead by the Supplemental Revenue Assistance (SURE) disaster program (not reauthorized under the 2014 farm bill). The individual ARC payment formula is 65% times the number of total base acres for the farm times the difference between the revenue guarantee and the actual crop revenue. The calculation for the guarantee and actual revenue are based on the aggregation of all covered crops on the farm using individual farm yields instead of county yields. Figure 3. Agriculture Risk Coverage (ARC)–County Coverage (payment when actual county-wide revenue drops below 86% of historical revenue [“shallow loss”]) Source: CRS. Notes: Five-year averages exclude high and low years. Instead of an ARC county guarantee on a crop-by-crop basis, farmers can select a farm-level guarantee for all covered crops on a farm. Payment acreage is reduced to 65% of base acres, and a single, whole farm guarantee (and payment) is calculated as a weighted average for all crops (i.e., not on a crop-by-crop basis). Figure 4. Agriculture Risk Coverage (ARC)–Low Revenue Scenario for Corn Source: CRS. Notes: Assumes five-year average price (excluding high and low years) is $5.27 per bushel and five-year average yield (excluding high and low years) is 100 bushels per acre. Marketing Assistance Loan Program The Marketing Assistance Loan (MAL) program provides additional financial benefits to farmers in the form of a guaranteed floor price for qualifying field crops, in addition to providing short-term financing. The process begins with a government loan to participating farmers of designated crops (covered commodities, plus upland cotton, extra long staple cotton, wool, mohair, and honey). The loan is made at a specified “per-unit” loan rate using the crop as collateral. This loan rate, in effect, establishes a price guarantee. Prior to loan maturity, if the local market price (called the “posted price”) is at or above the loan rate, the farmer repays the loan principal and interest. In contrast, when the posted price is below the loan rate, the farmer may repay the loan at that price (called the “loan repayment rate”) and pocket the difference as a “marketing loan gain.” Or, rather than taking the loan when the posted price is below the loan rate, farmers may request a “loan deficiency payment,” with the payment rate equal to the difference between the loan rate and the loan repayment rate. Program benefits are available on the entire crop produced, which means a farmer receives no benefits in the event of a crop loss. This is in contrast to the other two programs (PLC and ARC) that make payments on historical acres and yields and therefore are not dependent on current production. In the 2014 farm bill, for 2014-2018 crop years, loan rates remain the same as prior law except for upland cotton (see Table 1 for loan rates). The loan rate for upland cotton is changed from $0.52 per lb. to the simple average of the adjusted prevailing world price for the two immediately preceding marketing years, but not less than $0.45 per pound or more than $0.52 per pound. Given recent relatively high price levels, the MAL program has paid only limited benefits in recent years for most crops. As a result, some farmers have criticized loan rates as being too low relative to prevailing market prices. MAL program benefits, combined with payments under PLC and ARC, are subject to a payment limit of $125,000 per person for all covered commodities (except peanuts, which has a separate limit of $125,000). Benefits derived from loan forfeitures are exempt from the limit. The 2008 farm bill did not have a payment limit for MAL. Cotton Not Eligible for Either PLC or ARC Beginning with the 2014 farm bill, cotton is no longer a covered commodity and not eligible for PLC/ARC payments. Instead it is eligible for a new crop insurance policy called Stacked Income Protection or STAX. Cotton remains eligible for MAL but the loan rate was altered slightly as specified above. The policy revision was sought by U.S. cotton producers in an attempt to resolve a long-running trade dispute with Brazil that requires changing the U.S. cotton support program so it does not distort international markets. As part of the transition, farm payments are made for upland cotton for the 2014 crop year, and for 2015 if STAX is not available. Payment acres in 2014 equal 60% of 2013 cotton base acres and 36.5% of 2013 cotton base acres in 2015. Separately, the 2014 farm bill specifies that upon resolution of the trade dispute, funds paid by the U.S. government to Brazil (as part of an agreement made in 2010) may be used for research conducted collaboratively between Brazil and USDA research agencies or with a college, university, or research foundation located in the United States. Among several provisions, the agreement required annual payments of $147.3 million from the United States (via the Commodity Credit Corporation, CCC) to Brazil in order to provide technical assistance and capacity-building for Brazil’s cotton sector, but it explicitly excluded funding research. Planting Fruits and Vegetables on Base Acres Any crop may be planted without effect on base acres. However, payment acres on a farm are reduced in any crop year in which fruits, vegetables (other than mung beans and pulse crops), or wild rice have been planted on more than 15% of base acres (or 35% in the case of the individual coverage option for ARC). The reduction to payment acres is one-for-one for every

Mar 28, 2014

Unlawfully Present Aliens, Higher Education, In-State Tuition, and Financial Aid: Legal Analysis

Mar 28, 2014

Antibiotic Use in Food Animals: FDA’s Current Activities

Mar 28, 2014

Federal Funding for Health Insurance Exchanges

This report provides a state-by-state breakdown of the grants awarded to date. It then briefly describes the requirement for exchanges to be selfsustaining, and concludes with a discussion of the sources and amounts of funding that Department of Health and Human Services (HHS) has used and plans to use to support federally-facilitated exchange (FFE) operations.

Mar 28, 2014

State and Local "Sanctuary" Policies Limiting Participation in Immigration Enforcement

This report discusses legal issues related to state and local measures that limit law enforcement cooperation with federal immigration authorities. It includes legal background and select limitations on immigration enforcement including traditional "sanctuary" policies, declining to honor immigration detainers, shielding juveniles from federal detection, and modifying criminal sentences to avoid immigration consequences.

Mar 28, 2014

The Volcker Rule: A Legal Analysis

This report provides an introduction to the Volcker Rule, which is the regulatory regime imposed upon banking institutions and their affiliates under Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (P.L. 111-203). The Volker Rule is designed to prohibit “banking entities” from engaging in all forms of “proprietary trading” (i.e., making investments for their own “trading accounts”)—activities that former Federal Reserve Chairman Paul A. Volcker often condemned as contrary to conventional banking practices and a potential risk to financial stability. The statutory language provides only general outlines of prohibited activities and exceptions. Through it, however, Congress has empowered five federal financial regulators with authority to conduct coordinated rulemakings to fill in the details and complete the difficult task of crafting regulations to identify prohibited activities, while continuing to permit activities considered essential to the safety and soundness of banking institutions or to the maintenance of strong capital markets. In December 2014, more than two years after enactment of the law, coordinated implementing regulations were issued by the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System (FRB), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC). The Rule is premised on a two-pronged central core restricting activities by “banking entities”—a term that includes all FDIC-insured bank and thrift institutions; all bank, thrift, or financial holding companies; all foreign banking operations with certain types of presence in the United States; and all affiliates and subsidiaries of any of these entities. Specifically, the Rule broadly prohibits banking entities from engaging in “proprietary trading” and from making investments in or having relationships with hedge and similar “covered funds” that are exempt from registering with the CFTC as commodity pool operators or with the SEC under the Investment Advisors Act. The Rule couples its broad prohibitions with numerous exclusions and by designating myriad activities as permissible so long as various terms and conditions are met, unless they otherwise would involve or result in a material conflict of interest; a material exposure to high-risk assets or high-risk trading strategies; pose a threat to the safety and soundness of the banking entity; or pose a threat to the financial stability of the United States. The exceptions to the ban on proprietary trading include underwriting by securities underwriters; market-making “designed not to exceed the reasonably expected near term demands of clients”; trading in government securities; fiduciary activities; insurance company portfolio investments; and risk-mitigating hedging activities. The ban on investing in and owning “covered funds” exempts certain types of funds, under specified conditions, and permits de minimis investment in any such fund up to 3% of the outstanding ownership interests of the fund with an aggregate cap on the total ownership interest in “covered funds” of 3% of the banking entity’s core capital. To prevent evasion, the Rule has extensive requirements mandating comprehensive compliance programs that include ongoing management involvement, precise metrics measuring risk assessment, verification and documentation of any activities conducted under one of the Rule’s exceptions or exclusions, and recurring reports and assessments. Full compliance is required by July 21, 2015, subject to the possibility that further extensions may be provided by the regulators. In the case of investments involving “illiquid funds” subject to contractual provisions seriously impacting their marketability or sale, full divestiture might not be required until July 21, 2022.

Mar 27, 2014

The Tip Credit Provisions of the Fair Labor Standards Act (FLSA): In Brief

This report discusses the Fair Labor Standards Act (FLSA), enacted in 1938 (P.L. 75-718), which is the federal legislation that establishes the general minimum wage that must be paid to all covered workers.

Mar 27, 2014

Reporting Foreign Financial Assets Under Titles 26 and 31: FATCA and FBAR

All citizens of the United States as well as U.S. resident aliens are required to report their world-wide income for U.S. federal income tax purposes. However, where foreign assets are involved, this is an area in which taxpayers, knowingly or unknowingly, may fail to comply with the law. There are numerous information reporting requirements involving foreign assets that may assist the Internal Revenue Service (IRS) in recognizing a failure to report foreign income; however, both taxpayers and tax preparers may not be fully compliant with filing these forms. Again, this may be more a matter of ignorance of the requirements than any intent to skirt the law. Neither the reporting requirement imposed by the Foreign Account Tax Compliance Act (FATCA) nor the Foreign Bank Account Reporting (FBAR) imposed by the older Bank Secrecy Act directly involves reporting income for tax purposes. Instead, each involves reporting the existence of financial assets or accounts located outside of the United States. Although in some cases the same accounts or assets may be reported on each information-reporting form, both forms may be required. Failure to file either form if required may result in significant penalties, in some cases amounting to the entire balance of the unreported account or more. Tax evasion through offshore accounts can be facilitated by foreign financial institutions (FFIs) or other financial intermediaries. Although they may not be complicit in the tax evasion, these entities can play a part in curbing offshore tax evasion by reporting information on assets owned or controlled by entities subject to U.S. income tax. FATCA imposes reporting requirements on FFIs regarding their U.S. account holders, as well as obligations on non-financial foreign entities (NFFEs) regarding their U.S. owners. If the requirements are not met, then any withholdable payment to the entity is subject to withholding of tax at a rate of 30%. Since FATCA’s passage, there has been criticism of the FFI and NFFE provisions and how they relate to other countries, including whether FATCA’s requirements are inconsistent with existing U.S. treaty obligations and what happens when the requirements conflict with another country’s domestic (e.g., banking or privacy) laws. The Treasury Department and IRS have reached out to other countries and entered into bilateral intergovernmental agreements with 24 of them. In general, these provide that the other country’s FFIs will be deemed compliant with FATCA’s requirements if they comply with the agreement. FATCA’s requirements have also been criticized as overly burdensome and stakeholders have indicated they have insufficient time to prepare for them. The IRS has responded by extending various deadlines under FATCA—while the 2010 law enacting FATCA provides that, in general, its provisions “apply to payments made after December 31, 2012,” the IRS has on several occasions extended various deadlines, with many provisions scheduled to go into effect on July 1, 2014. Finally, legislation has been introduced in the 113th Congress that would repeal much of FATCA (S. 887); modify FATCA with the intent of “strengthening” it (H.R. 1554, H.R. 3666, S. 1533, and S. 268); or require that its effects on U.S. citizens living abroad be studied (H.R. 597).

Mar 27, 2014

EPA and the Army Corps' Proposed Rule to Define "Waters of the United States"

This report describes the March 25 proposed rule to define "waters of the United States," particularly focused on clarifying the regulatory status of waters located in isolated places in a landscape, the types of waters with ambiguous jurisdictional status following the Supreme Court's ruling. It includes a table comparing the proposal to existing regulatory language.

Mar 27, 2014

Regulation of Clinical Tests: In Vitro Diagnostic (IVD) Devices, Laboratory Developed Tests (LDTs), and Genetic Tests

In vitro diagnostic (IVD) devices are used in the analysis of human samples, such as blood or tissue, to provide information in making health care decisions. Examples of IVDs include pregnancy test kits or blood glucose tests for home use; laboratory tests for infectious disease, such as HIV or hepatitis, and routine blood tests, such as cholesterol and anemia; and tests for various genetic diseases or conditions. More recently, a specific type of diagnostic test--called a companion diagnostic--has been developed that may be used to select the best therapy, at the right dose, at the correct time for a particular patient; this is often referred to as personalized or precision medicine. This report provides an overview of federal regulation of IVDs by FDA, through the Federal Food, Drug, and Cosmetics Act (FFDCA) and the Public Health Service Act (PHSA), and by CMS, through the Clinical Laboratory Improvement Amendments (CLIA) of 1988.

Mar 27, 2014

U.S. Crude Oil Export Policy: Background and Considerations

This report provides background and context about the crude oil legal and regulatory framework, discusses motivations that underlie the desire to export U.S. crude oil, and presents analysis of issues that Congress may choose to consider during debate about U.S. crude oil export policy.

Mar 26, 2014

Worker Participation in Employer-Sponsored Pensions: A Fact Sheet

The main part of this report is a fact sheet that provides data on the percentage of American workers who have access to and who participate in employer-sponsored pension plans. The data was collected by the Bureau of Labor Statistics (BLS) through the National Compensation Survey (NCS).

Mar 26, 2014

Marijuana: Medical and Retail -- Selected Legal Issues

This report discusses state medical marijuana laws that grants registered patients, their doctors, and providers immunity from the consequences of state law.

Mar 25, 2014

Marijuana: Medical and Retail -- An Abbreviated View of Selected Legal Issues

This report discusses the federal law regarding marijuana that is classified as a Schedule I Controlled Substance. The federal Controlled Substances Act (CSA) outlaws the possession, cultivation, or distribution of marijuana except for authorized research.

Mar 25, 2014

Bonus Depreciation: Economic and Budgetary Issues

This report discusses bonus depreciation as either a temporary stimulus provision or a permanent part of the tax code.

Mar 24, 2014

Green Infrastructure and Issues in Managing Urban Stormwater

This report discusses the stormwater problems that occur because rainwater that once soaked into the ground now runs off hard surfaces like rooftops, parking lots, and streets in excessive amounts. The report also discusses a framework document, intended to provide communities with flexibility to prioritize needed water infrastructure investments.

Mar 21, 2014

Forestry Provisions in the 2014 Farm Bill (P.L. 113-79)

The Agricultural Act of 2014 (P.L. 113-79, the 2014 farm bill) was signed into law by President Obama on February 7, 2014, after both the House and Senate voted to approve a conference agreement. The 2014 farm bill establishes agricultural and food policy for the next several years, and also addresses several aspects of federal forestry policy. Forestry provisions were included in the Forestry title (Title VIII) of the 2014 farm bill as well as in some of the other titles. The 2014 farm bill generally repeals, reauthorizes, and modifies existing forestry assistance programs and provisions under two main authorities: the Cooperative Forestry Assistance Act (CFAA; P.L. 95-313; 16 U.S.C. §§2101-2114), as amended, and the Healthy Forests Restoration Act of 2003 (HFRA; P.L. 108-148; 16 U.S.C. §§6501-6591), as amended. Several forestry assistance programs were reauthorized through FY2018. However, many federal forestry assistance programs are permanently authorized, and thus do not require reauthorization in the farm bill. The farm bill also repeals programs that had expired or had never received appropriations. The 2014 farm bill includes provisions addressing the management of the National Forest System. For example, it permanently reauthorizes stewardship contracting and extends the good neighbor authority nationwide, both tools the Forest Service uses to conduct restoration and other forest management projects. The farm bill also authorizes the designation of treatment areas within the National Forest System due to insect or disease infestation, and allows for expedited project planning within those designated areas. In addition, the farm bill includes provisions to modify the existing public notice, comment, and appeals process for land and resource management plans. Congress considered other forestry provisions which were not included in the final law, but which might be debated in other legislation. Protecting communities from wildfire continues to be a priority for some, while controlling invasive species is a priority for others. How to address these issues was debated in terms of both federal assistance programs to nonfederal forest owners and management of the National Forest System. In addition, some wanted to change the funding mechanisms and amounts for several forestry assistance programs. Issues from this and previous farm bills may also become of interest again in the future, such as assisting forest-dependent communities in diversifying their economies or providing payments for ecosystem services—forest values that have not traditionally been sold in the marketplace.

Mar 21, 2014

U.S. Circuit and District Court Judges: Profile of Select Characteristics

This report addresses ongoing congressional interest in select characteristics of lower federal court judges. The analysis of the report focuses on demographic and other characteristics of active and senior U.S. circuit and district court judges who are currently serving on the federal bench. Consequently, the statistics provided in the report do not necessarily reflect all of a President’s circuit or district court appointments during his time in office. A judge in active service has not taken senior status, retired, or resigned. A judge who has assumed senior status continues, on a part-time basis, to perform the duties of his or her office (which can include hearing cases). As discussed below, “nontraditional” judges are those judges who belong to demographic groups from which, historically, individuals were not often selected, if at all, for federal judgeships. Specifically, for the purposes of this report, white women, non-white men, and non-white women are considered nontraditional judges. Some of the report’s findings include the following: As of March 7, 2014, the greatest percentage of active circuit court judges were appointed by President G.W. Bush (32.1%), followed by Presidents Obama (25.3%) and Clinton (25.3%). The greatest percentage of senior circuit court judges were appointed by President Reagan (33.3%). Of the active U.S. circuit court judges, 51.2% are white men, 25.3% are white women, 16.7% are non-white men, and 6.8% are non-white women. Altogether, 48.8% of active circuit court judges are nontraditional judges. In contrast, of senior circuit court judges, 80.7% are white men, 9.6% are white women, 8.8% are non-white men, and less than 1.0% are non-white women. Altogether, 19.3% of senior circuit court judges are nontraditional judges. After five years in office, President Obama has appointed the greatest percentage of nontraditional active U.S. circuit court judges currently sitting on the bench (34.2%), followed by Presidents Clinton (32.9%) and G.W. Bush (25.3%). Of senior circuit court judges, President Carter appointed the greatest percentage (54.5%). There is, however, variation in the percentage of active circuit court judges belonging to specific demographic groups that were appointed by particular Presidents. For example, of women serving as active circuit court judges as of March 7, 2014, Presidents G.W. Bush and Clinton tied for having appointed the greatest percentage (each with 30.8%). As of December 31, 2013, 32.5% of active circuit court judges were eligible, based on age and length of service as Article III judges, to assume senior status. Of those eligible for senior status, President Clinton appointed nearly half (47.2%). As of this writing, CRS has not calculated such statistics for active U.S. district court judges. The greatest percentage of active district court judges were appointed by President G.W. Bush (38.8%), followed by President Obama (29.7%). The greatest percentage of senior district court judges were appointed by President Reagan (29.2%). Of active U.S. district court judges, 52.7% are white men, 22.1% are white women, 15.4% are non-white men, and 9.8% are non-white women. Altogether, 47.3% of active district court judges are nontraditional judges. Of senior district court judges, 78.5% are white men, 11.0% are white women, 8.7% are non-white men, and 1.8% are non-white women. Altogether, 21.5% of senior district court judges are nontraditional judges. Of nontraditional active U.S. district court judges currently on the bench, President Obama has appointed the greatest percentage (38.6%), followed by Presidents G.W. Bush (28.8%) and Clinton (22.8%). Of senior district court judges, Presidents Clinton and Carter appointed the greatest percentages (48.9% and 22.3%, respectively). There is, however, variation in the percentage of active district court judges belonging to specific demographic groups that were appointed by particular Presidents. For example, of Hispanics serving as active district court judges, President G.W. Bush appointed the greatest percentage (42.6%).

Mar 19, 2014

Military Base Closures: Frequently Asked Questions

These FAQs examine the provisions in the Constitution and in permanent statute that define and limit federal authority to disestablish or diminish employment at defense sites. They do not discuss the special, temporary BRAC (Base Realignment and Closure) process that Congress has periodically authorized for the reduction of defense infrastructure.

Mar 19, 2014

Considering Legislation on the House Floor: Common Practices in Brief

This brief overview explains the most common ways legislation is considered on the House floor, and it describes the types of questions most likely to be voted on and the opportunities for legislative debate that are most frequently used by Members. The most common method used to consider bills and resolutions in the House is suspension of the rules. This method has evolved as a way for measures that enjoy widespread support to be quickly processed by the House. A motion to suspend the rules and pass a bill is debatable for 40 minutes. The Member making the motion controls 20 minutes of the time, and another Member controls the other 20 minutes of time. When debate has concluded, a single vote is held on the question of suspending the rules and passing the measure. Members cannot offer amendments from the floor, but an amendment might be included in the motion. A two-thirds vote is required to pass a measure under suspension. Many suspension motions are passed by voice vote. Most major bills, however, are considered through a multi-stage process involving the Committee on Rules. Special rules are House resolutions reported by the Committee on Rules that set the terms for debating and amending measures. Through special rules, the House majority can customize floor procedures for considering each bill. The House first approves a special rule and then considers the bill under the terms of that rule. After an hour of debate on a special rule, a Member typically moves the previous question, a motion that proposes to end consideration of a matter. The previous question is almost invariably agreed to, and the House then votes on approving the special rule. When a measure is considered under the terms of a special rule, there is first a period for general debate on the bill. After general debate, there might be an opportunity to offer amendments to the bill, but it depends on the special rule. A closed rule is one that does not allow amendments to be offered from the floor. Under an open rule, in contrast, Members can offer any amendment that does not violate a House rule, including statutory provisions that the House has designated to function as House rules, such as the Budget Act. More commonly today, amendments are offered under rules that allow specific amendments identified in the report of the Rules Committee accompanying the special rule. If several amendments will be considered, the rule provides that the House resolve into the Committee of the Whole, a parliamentary device designed to allow more efficient consideration of legislation than provided when the House meets in other forms. Before the House votes on final passage of a measure, it rises from sitting as Committee of the Whole and returns to sitting as the House. There is then typically a record vote on a motion to recommit. In its most common form today, the motion to recommit is made with instructions, which is effectively a last opportunity for a minority party Member to offer an amendment. A bill or joint resolution must pass both the House and the Senate in precisely the same form before it can be sent to the President. Historically, the House has resolved its differences with the Senate on major legislation through conference committees (panels of Representatives and Senators from the committees of jurisdiction who meet to negotiate a compromise version of the bill). The resulting recommended legislation—the conference report—must be approved by both the House and Senate and cannot be amended. Sometimes, the House and Senate resolve their differences not through conference committee, but through amendments between the houses. In this process, the chambers shuttle a measure back and forth until they both agree to the same text.

Mar 14, 2014

Energy Provisions in the 2014 Farm Bill (P.L. 113-79)

This report focuses on the policies contained in the 2014 farm bill that support agriculture based renewable energy, especially biofuels. The introductory sections of this report briefly describe how U.S. Department of Agriculture (USDA) bioenergy policies evolved and how they fit into the larger context of U.S. biofuels policy.

Mar 12, 2014