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CRS Reports

Congressional Research Service reports providing nonpartisan analysis of major federal policy issues.

4,930 reports indexed · sourced from EveryCRSReport.com

R42468Economic Policy

The Dominican Republic-Central America- United States Free Trade Agreement (CAFTADR): Developments in Trade and Investment

On August 5, 2004, the United States entered into the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). This permanent, comprehensive, and reciprocal trade agreement eliminates tariff and non-tariff barriers to two-way trade, building on unilateral trade preferences begun under the 1983 Caribbean Basin Initiative (CBI). CAFTA-DR reinforces the idea that growth in trade correlates closely with policies that promote economic stability, private investment in production, public investment in education, infrastructure, logistics, and good governance in general.

Apr 9, 2012

R42471

Indian Gaming: Legal Background and the Indian Gaming Regulatory Act (IGRA)

In the 1980s, a number of Indian tribes developed high-stakes bingo and other gaming operations to raise non-federal revenue to fund their governments. In 1988, after the Supreme Court held, in California v. Cabazon Band of Mission Indians, that federal and tribal interests in Indian gaming preempted state law such that state regulation of gaming did not apply to tribal gaming operations on tribal land, Congress passed the Indian Gaming Regulatory Act (IGRA). IGRA provides a statutory basis for Indian tribes to conduct gaming on “Indian lands” and establishes a regime for regulating Indian gaming. It prohibits gaming on newly acquired land—that is, land acquired in trust after October 17, 1988—subject to two exceptions: the “two part determination”; and, land taken in trust as part of a land settlement, restoration of land for a restored tribe, or the initial reservation of a newly acknowledged tribe. In establishing a framework for regulating Indian gaming, IGRA was intended to balance the interests of the tribes, the states, and the federal government in Indian gaming and apportion responsibility for regulating it accordingly. To do this, IGRA divides Indian gaming into three classes: class I includes traditional or social gaming and is subject to exclusive tribal regulation; class II covers bingo and similar games and is subject to tribal regulation and oversight by the National Indian Gaming Commission (NIGC); and, class III includes all other gaming, including casino gaming or Las Vegas-style gaming, and generally can only be conducted pursuant to tribal-state compacts that must be approved by the Secretary of the Interior. IGRA also created the NIGC to provide regulation of Indian gaming on the federal level. The tribal-state compact is the key to tribal casino gaming. Recognizing that some states might simply stonewall tribes and refuse to negotiate class III gaming compacts, Congress required that upon a request from a tribe to negotiate a compact, a state must negotiate in good faith. In order to create an incentive for states to negotiate in good faith, IGRA provided that tribes could sue states in federal district court for failing to negotiate in good faith. IGRA prescribes a series of steps to ensure that ultimately a tribe would be able to engage in class III gaming even over the state’s objections. However, in Seminole Tribe of Florida v. Florida, the Supreme Court held that Congress did not have authority under the Indian Commerce Clause to waive the states’ sovereign immunity to suits by tribes to enforce the good faith negotiation requirement. This decision, therefore, removed IGRA’s practical guarantee that tribes would be able to engage in class III gaming over the objections of the state and gave states a veto over tribal class III gaming—a state can simply refuse to negotiate a class III compact to deny a tribe the ability to engage in class III gaming. Increasingly, states have demanded significant revenue sharing and non-gaming concessions in exchange for class III compacts. In the last five years, there have been several bills introduced in Congress to amend IGRA, primarily to restrict off-reservation gaming. Two bills have been introduced in the 112th Congress to amend IGRA. H.R. 4033, the Giving Local Communities a Voice in Tribal Gaming Act, would give local jurisdictions the right to veto a class III gaming operation that the state has agreed to in a compact. S. 771, the Tribal Gaming Eligibility Act, would restrict the availability of off-reservation land for gaming by requiring that tribes demonstrate, by meeting certain criteria, that they have modern and historical ties to the land on which they propose to game.

Apr 9, 2012

R42465Economic Policy

U.S. Oil Imports and Exports

Over the last six years, net oil imports have fallen by 33% to average 8.4 million barrels per day (Mb/d) in 2011. This represents 45% of domestic consumption, down from 60% in 2005. Oil is a critical resource for the U.S. economy, but despite policy makers’ long-standing concern, U.S. oil imports had generally increased for decades until peaking in 2005. Since then, the economic downturn and higher oil prices were a drag on oil consumption, while price-driven private investment and policy helped increase domestic supply of oil and oil alternatives. Net imports are gross imports minus exports. The decline in net imports has manifested itself as a decrease in gross imports and an increase in exports of petroleum products. Gross U.S. imports of crude oil and petroleum products averaged 11.4 Mb/d in 2011, down 17% since 2005. More than a third of gross imports came from Canada and Mexico in 2011. About 40% came from members of the Organization for the Petroleum Exporting Countries (OPEC), mostly from OPEC members outside the Persian Gulf. Regionally, the largest share of U.S. imports come into the Gulf Coast region, which holds about half of U.S. refining capacity and sends petroleum products to other parts of the country and abroad. All regions of the country import more crude than refined products except for the East Coast, where petroleum products imports may rise further due to refinery closures. U.S. oil exports, made up almost entirely of petroleum products, averaged 2.9 Mb/d in 2011. This is up from export of 1.2 Mb/d in 2005, led by growing export of distillates (diesel and related fuels) and gasoline. More than 60% of U.S. exports went to countries in the Western Hemisphere, particularly to countries such as Mexico and Canada from which the U.S. imports crude oil. Exports occur largely as a result of commercial decisions by oil market participants which reflect current oil market conditions as well as past investment in refining. As a result, net oil imports fell from a peak of 12.5 Mb/d in 2005 to 8.4 Mb/d in 2011, their lowest level since 1995. A consensus is generally emerging among energy analysts that U.S. oil imports may be past their peak, reached in 2005. Imports as a share of consumption are expected to fall further, to less than 40% after 2020 driven by tighter fuel economy standards and increased domestic supply. Despite the decline in net import volumes, the cost of net imports has increased due to rising oil prices. The aggregate national cost of oil imports is a function of the volume of oil imported and the price of that oil. The United States spent about $327 billion on net oil imports in 2011. Being a net importer of a particular good is not necessarily negative for an economy, but greater national oil import dependence can amplify the negative economic impacts of oil price increases. Oil import and export developments pose a host of policy issues. Concerns about import dependence continue to generate interest in policy options to directly discourage imports or to reduce the need for imports by increasing domestic supply and decreasing demand. Rising exports at a time of rising prices has led to calls for policies to restrict such trade. The debate around the Keystone XL pipeline involves concerns about imports, exports, and the environment. The rising cost for fuels has led to calls for release of the Strategic Petroleum Reserve, meant to provide a short term policy option in case of supply disruptions. Policy options may entail various economic, fiscal, and environmental trade-offs.

Apr 4, 2012

R42461

Hydraulic Fracturing: Chemical Disclosure Requirements

This report provides an overview of current and proposed laws at the state and federal levels that require the disclosure of the chemicals added to the fluid used in hydraulic fracturing.

Apr 4, 2012

R42462Foreign Affairs

Defining Homeland Security: Analysis and Congressional Considerations

This report discusses the evolution of national and DHS-specific homeland security strategic documents and their homeland security definitions and missions, and analyzes the policy question of how varied homeland security definitions and missions may affect the development of national homeland security strategy. This report, however, does not examine Department of Homeland Security implementation of strategy.

Apr 3, 2012

R42459Agricultural Policy

Conservation Compliance and U.S. Farm Policy

Apr 2, 2012

R42460Economic Policy

The Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy

This report looks at the history, purpose, and current status of the Strategic Petroleum Reserve.

Apr 2, 2012

R42454Constitutional Questions

Congressional Participation in Article III Courts: Standing to Sue

Mar 30, 2012

R42451

Taxing Large Pass-Throughs As Corporations: How Many Firms Would Be Affected?

Several lawmakers and the Obama Administration have expressed interest in taxing large partnerships and S corporations, also known as pass-throughs, as corporations. Part of this interest appears to be related to deficit and debt concerns. Pass-throughs may be a source of revenue since they currently account for over half of all business income but generally pay no corporate tax. Additionally, there is a growing concern that the current business tax environment may be inequitable and inefficient. Today, two business that are otherwise identical except that one is a corporation and the other is a pass-through are taxed differently. This disparity could be viewed as inequitable since the companies are similarly positioned to pay taxes. Additionally, the lack of tax uniformity across business types may cause an inefficient allocation of resources if business decisions are made for tax reasons and not economic reasons. This report uses aggregate and industry-level tax data to analyze how many partnerships and S corporations could be subject to the corporate tax. It is estimated that if a receipt-based measure of size is used, then between 0.3% and 1.5% of S corporations and partnerships could be taxed as corporations depending on if a “large” pass-through is defined as one with receipts exceeding $50 million or exceeding $10 million. Using an asset-based measure of size produces similar estimates. It is estimated that between 0.3% and 1.0% of pass-throughs could pay the corporate tax depending on whether a $100 million or $25 million asset threshold is used to define a “large” firm. Although estimates suggest that only a small percentage of pass-throughs could be considered large for corporate tax purposes, this report also finds that those firms are responsible for a significant amount of economic activity, indicating that the proposed policy change could raise substantial revenue. For example, 30% of S corporation receipts are generated by the largest 0.3% of S corporations, and 41% of partnership receipts are generated by the largest 0.2% of partnerships. Similarly, the largest 0.2% of S corporations hold 43% of S corporation assets, while the largest 1.1% of partnerships hold 78% of partnership assets. Taxing large pass-throughs as corporations would also allow for lower tax rates as it would broaden the corporate tax base. Lower tax rates combined with a reduction in the tax disparity between the corporate and non-corporate sectors could improve business tax equity and the allocation of resources relative to current policy. At the same time, an alternative policy prescription that is generally more appealing to economists—integration of the corporate and individual tax systems—could also achieve these objectives. If integration is not possible, however, then reducing the tax discrepancy between large pass-throughs and corporations may be another viable alternative, depending on its design. The focus on businesses is not the only perspective when it comes to changing the tax treatment of pass-throughs. CRS Report R42359, Who Earns Pass-Through Business Income? An Analysis of Individual Tax Return Data, by Mark P. Keightley, examined the issue of pass-through taxation from the perspective of individual taxpayers. That report concluded that although the corporate tax would be levied on pass-throughs, individuals would bear the full burden of the tax since businesses are legal, not physical entities. In addition, the analysis in that report suggests that higher-income taxpayers would generally bear most of the burden from increased pass-through taxes because they earn the majority of pass-through income and are limited in their ability to shift the burden to lower-income taxpayers.

Mar 30, 2012

R42458Appropriations

Offsets, Supplemental Appropriations, and the Disaster Relief Fund: FY1990-FY2012

This report discusses the recent history of offsetting rescissions in paying for supplemental appropriations to the Federal Emergency Management Agency's Disaster Relief Fund (DRF).

Mar 29, 2012

R42438

Burma's April Parliamentary By-Elections

The Republic of the Union of Myanmar (Burma) is scheduled to hold parliamentary by-elections on April 1, 2012. Depending on the conduct of the election and the official election results, the Obama Administration may seek to alter policy towards Burma, possibly including the waiver or removal of some current sanctions. Such a shift may require congressional action, or may be done using executive authority granted by existing laws. Under current law, President Barack Obama has the authority to waive many existing sanctions on Burma. Alternatively, the White House may ask Congress to consider legislation removing or altering some the existing sanctions. For its own part, Congress may decide to re-examine U.S. policy towards Burma and make whatever changes it deems appropriate.

Mar 28, 2012

R42444

Emergency Unemployment Compensation (EUC08): Current Status of Benefits

Mar 28, 2012

R42448Appropriations

Pivot to the Pacific? The Obama Administration’s “Rebalancing” Toward Asia

In the fall of 2011, the Obama Administration issued a series of announcements indicating that the United States would be expanding and intensifying its already significant role in the Asia-Pacific, particularly in the southern part of the region. The fundamental goal underpinning the shift is to devote more effort to influencing the development of the Asia-Pacific’s norms and rules, particularly as China emerges as an ever-more influential regional power. Given that one purpose of the “pivot” or “rebalancing” toward the Asia-Pacific is to deepen U.S. credibility in the region at a time of fiscal constraint, Congress’s oversight and appropriations roles, as well as its approval authority over free trade agreements, will help determine to what extent the Administration’s plans are implemented and how various trade-offs are managed. Areas of Continuity. Much of the “pivot” to the Asia-Pacific is a continuation and expansion of policies already undertaken by previous administrations, as well as earlier in President Obama’s term. Since President Obama’s inauguration in 2009, the United States has given considerable time and emphasis to Southeast Asia and to regional multilateral institutions. Under President George W. Bush, the United States emphasized the strengthening of relations with existing allies in Asia, began moving toward a more flexible and sustainable troop presence in the region, concluded a free trade agreement (FTA) with South Korea, brought the United States into the Trans-Pacific Partnership (TPP) FTA negotiations, and forged new partnerships with India and Vietnam. All of these steps have been furthered by the Obama Administration. Transformational Elements. That said, there are a number of new aspects of the shift. The most dramatic lie in the military sphere. As part of a plan to expand the U.S. presence in the southwestern Pacific and make it more flexible, the Obama Administration has announced new deployments or rotations of troops and equipment to Australia and Singapore. U.S. officials have also pledged that planned and future reductions in defense spending will not come at the expense of the Asia-Pacific (nor of the Middle East). Additionally, underlying the “pivot” is a broader geographic vision of the Asia-Pacific region that includes the Indian Ocean and many of its coastal states. Benefits, Costs, and Risks. Underlying the “pivot” is a conviction that the center of gravity for U.S. foreign policy, national security, and economic interests is being realigned and shifting towards Asia, and that U.S. strategy and priorities need to be adjusted accordingly. For many observers, it is imperative that the United States give more emphasis to the Asia-Pacific. Indeed, for years, many countries in the region have encouraged the United States to step up its activity to provide a balance to China’s rising influence. There are a number of risks to the “pivot,” however. In an era of constrained U.S. defense resources, an increased U.S. military emphasis on the Asia-Pacific region might result in a reduction in U.S. military capacity in other parts of the world. Another budgetary consideration is that plans to restructure U.S. military deployments in Asia and minimize cuts in the Navy may run up against more restrictive funding constraints than plans yet assume. Additionally, the perception among many that the “rebalancing” is targeted against China could strengthen the hand of Chinese hard-liners. Such an impression could also potentially make it more difficult for the United States to gain China’s cooperation on a range of issues. Additionally, the prominence the Obama Administration has given to the initiative has raised the costs to the United States if it or successor administrations fail to follow through on public pledges made, particularly in the military realm.

Mar 28, 2012

R42455Economic Policy

Energy Storage for Power Grids and Electric Transportation: A Technology Assessment

Energy storage technology has great potential to improve electric power grids, to enable growth in renewable electricity generation, and to provide alternatives to oil-derived fuels in the nation’s transportation sector. In the electric power system, the promise of this technology lies in its potential to increase grid efficiency and reliability—optimizing power flows and supporting variable power supplies from wind and solar generation. In transportation, vehicles powered by batteries or other electric technologies have the potential to displace vehicles burning gasoline and diesel fuel, reducing associated emissions and demand for oil. Federal policy makers have become increasingly interested in promoting energy storage technology as a key enabler of broad electric power and transportation sector objectives. The Storage Technology for Renewable and Green Energy Act of 2011 (S. 1845), introduced on November 10, 2011, and the Federal Energy Regulatory Commission’s Order 755, Frequency Regulation Compensation in the Organized Wholesale Power Markets, are just two recent initiatives intended to promote energy storage deployment in the United States. Numerous private companies and national laboratories, many with federal support, are engaged in storage research and development efforts across a very wide range of technologies and applications. This report attempts to summarize the current state of knowledge regarding energy storage technologies for both electric power grid and electric vehicle applications. It is intended to serve as a reference for policymakers interested in understanding the range of technologies and applications associated with energy storage, comparing them, when possible, in a structured way to highlight key characteristics relevant to widespread use. While the emphasis is on technology (including key performance metrics such as cost and efficiency), this report also addresses the significant policy, market, and other non-technical factors that may impede storage adoption. It considers eight major categories of storage technology: pumped hydro, compressed air, batteries, capacitors, superconducting magnetic energy storage, flywheels, thermal storage, and hydrogen. Energy storage technologies for electric applications have achieved various levels of technical and economic maturity in the marketplace. For grid storage, challenges include roundtrip efficiencies that range from under 30% to over 90%. Efficiency losses represent a tradeoff between the increased cost of electricity cycled through storage, and the increased value of greater dispatchability and other services to the grid. The capital cost of many grid storage technologies is also very high relative to conventional alternatives, such as gas-fired power plants, which can be constructed quickly and are perceived as a low risk investment by both regulated utilities and independent power producers. The existing market structures in the electric sector also may undervalue the many services that electricity storage can provide. For transportation storage, the current primary challenges are the limited availability and high costs of both battery-electric and hydrogen-fueled vehicles. Additional challenges are new infrastructure requirements, particularly for hydrogen, which requires new distribution and fueling infrastructure, while battery electric vehicles are limited by range and charging times, especially when compared to conventional gasoline vehicles. Substantial research and development activities are underway in the United States and elsewhere to improve the economic and technical performance of electricity storage options. Changes to market structures and policies may also be critical components of achieving competitiveness for electricity storage devices. Removing non-technical barriers may be as important as technology improvements in increasing adoption of energy storage to improve grid and vehicle performance.

Mar 27, 2012

R42443Foreign Affairs

Israel: Possible Military Strike Against Iran's Nuclear Facilities

Several published reports indicate that top Israeli decision makers now are seriously considering whether to order a military strike on Iran's nuclear facilities, and if so, when. This report analyzes key factors that may influence current Israeli political decisions relating to a possible strike on Iranian nuclear facilities. For Congress, the potential impact-short- and long-term-of an Israeli decision regarding Iran and its implementation is a critical issue of concern. By all accounts, such an attack could have considerable regional and global security, political, and economic repercussions, not least for the United States, Israel, and their bilateral relationship. This report has many aspects that are the subject of vigorous debate and remain fully or partially outside public knowledge.

Mar 27, 2012

R40819Agricultural Policy

Agricultural Research, Education, and Extension: Issues and Background

Mar 23, 2012

R42435Domestic Social Policy

The Challenge of Individual Income Tax Reform: An Economic Analysis of Tax Base Broadening

Congressional interest in a major reform of the individual income tax that would broaden the base and use the additional tax revenues to lower rates and/or reduce the deficit has increased. This report discusses ways in which the tax base can be broadened, tax expenditures, and impediments to broadening the base/eliminating or reducing expenditures.

Mar 22, 2012

R42439American Law

Compensating State and Local Governments for the Tax-Exempt Status of Federal Lands: What Is Fair and Consistent?

The federal government owns significant amounts of land and resources that are exempt from state and local taxation. State and local governments provide a wide variety of services—education, social services, public safety, transportation facilities, utilities, and much more. These services are funded through intergovernmental transfers (federal grants to state governments and federal and state grants to local governments), user fees, and state and local levied taxation—property taxes, income taxes, sales and use taxes, excise taxes, severance taxes, and more. Congress has established programs to compensate state and local governments for the tax-exempt status of federal lands. Some propose that “fair” compensation would provide payments that are equivalent to the taxes that would be paid if the lands were privately owned. Assessing such tax equivalency, however, is difficult because of the substantial variability in state and local reliance on and rates for the various types of taxes. Others suggest that “fair” compensation would provide payments that offset the costs imposed on state and local governments from the federal lands, although this would exclude payments for governmental services that are not paid by the beneficiaries (e.g., social services). Providing consistent payments is a challenge; permanent appropriations are the most stable, but are difficult to establish and create permanent obligations. Finally, which lands to include for federal payments may seem straightforward, but lack of precise data on the federal lands might compromise accuracy of payments, and federal responsibility for tax-exempt Indian lands is unclear. A plethora of federal payment programs exist, enacted at various times and for various reasons over the past century. Some payment programs are based on numbers of Indian children or children of federal employees (about $1.3 billion annually), some on federal receipts (about $0.5 billion annually), and some on federal acreage (about $0.4 billion annually). Some of the receipt- and acreage-based payments are broad, covering many federal lands, while others are quite narrow (e.g., based on sales of a particular resource within a limited area). Some are permanently authorized, and have mandatory spending authority (payments without annual action by Congress). Others require periodic reauthorization, annual appropriations, or both. Although most of the federal payment programs were justified as compensation for the tax-exempt status of federal lands, the programs poorly reflect state and local tax equivalency or state and local costs of providing governmental services. In some places, the payments probably exceed what a private landowner would pay; in others, the payments fall short of what many might consider “fair” compensation. These possibly inequitable results likely occur from differences in the congressional committees of jurisdiction over various lands and programs and over time, and because only some programs were established with mandatory spending authority. The mandatory spending authority for two relatively large payment programs—the Secure Rural Schools and Community Self-Determination Act (SRS Act) program and the Payments in Lieu of Taxes (PILT) program—expired at the end of FY2011 and will expire at the end of FY2012, respectively. As Congress debates the reauthorization of the SRS Act, the mandatory spending authority of the PILT program, and other payment programs, it might consider the broader questions of what is fair and consistent compensation to state and local governments for the tax-exempt status of federal lands.

Mar 22, 2012

R42433Appropriations

Federal Health Centers

This report provides an overview of the federal health center program including its statutory authority, program requirements, and appropriation levels. The report then describes health centers in general, where they are located, their patient population, and some outcomes associated with health center use. It also describes some federal programs available to assist health center operations including the federally qualified health center (FQHC) designation for Medicare and Medicaid payments. The report then concludes with a brief discussion of issues for Congress such as the potential effects of the ACA on health centers, the health center workforce, and financial considerations for health centers in the context of changing federal and state budgets. Finally, the report has two appendixes that describe (1) FQHC payments for Medicare and Medicaid beneficiaries served at health centers; and (2) programs that are similar to health centers but not authorized in Section 330 of the PHSA.

Mar 21, 2012

R42434Immigration Policy

Immigration of Temporary Lower-Skilled Workers: Current Policy and Related Issues

U.S. employers in various industries argue that they need to hire foreign workers to perform lower-skilled jobs, while others maintain that many of these positions could be filled by U.S. workers. While the discussion of current guest worker programs in this report focuses on the H-2A and H- 2B visas, it also covers the Summer Work Travel (SWT) program, the largest of several programs under the J-1 visa for participants in work- and study-based exchange visitor programs. The SWT program is particularly relevant because participants work largely in unskilled jobs, including H-2B-like seasonal jobs at resorts and amusement parks.

Mar 20, 2012

R42432Energy Policy

U.S. Crude Oil Production in Federal and Non-Federal Areas

A brief look at how oil prices are affected by production.

Mar 20, 2012

R42405Appropriations

Europe's Energy Security: Options and Challenges to Natural Gas Supply Diversification

This report focuses on potential approaches that Europe might employ to diversify its sources of natural gas supply, and Russia's role, as well as identifying some of the issues hindering efforts to develop alternative suppliers of natural gas. The report assesses the potential suppliers of natural gas to Europe and the short- to medium-term hurdles needed to be overcome for those suppliers to be credible, long-term providers of natural gas to Europe. The report looks at North Africa and Central Asia as possible sources of future energy supply.

Mar 13, 2012

R41114Economic Policy

The Hatch-Waxman Act: A Quarter Century Later

Mar 13, 2012

R42390National Defense

Federal Contracting and Subcontracting with Small Businesses: Issues in the 112th Congress

Congress has generally broad authority to impose requirements upon the federal procurement process, or the process whereby agencies obtain goods and services from the private sector. One of the many ways in which Congress has exercised this authority is by enacting measures intended to promote contracting and subcontracting with "small businesses" by federal agencies. This report describes and analyzes measures that Members of the 112th Congress have enacted or proposed in response to particular issues pertaining to small business contracting and subcontracting.

Mar 7, 2012

R42395American Law

A Retrospective of House Rules Changes Since the 110th Congress

Mar 7, 2012

R42391National Defense

Legal Authorities Governing Federal Contracting and Subcontracting with Small Businesses

Congress has generally broad authority to impose requirements upon the federal procurement process, or the process whereby agencies obtain goods and services from the private sector. One of the many ways in which Congress has exercised this authority is by enacting measures intended to promote contracting and subcontracting with "small businesses" by federal agencies.

Mar 7, 2012

R42394Domestic Social Policy

Drug Testing and Crime-Related Restrictions in TANF, SNAP, and Housing Assistance

Mar 7, 2012

R42385Foreign Affairs

U.S. Defense Articles and Services Supplied to Foreign Recipients: Restrictions on Their Use

In accordance with United States law, the U.S. Government places conditions on the use of defense articles and defense services transferred by it to foreign recipients. Violation of these conditions can lead to the suspension of deliveries or termination of the contracts for such defense items, among other things. On occasion, the President has indicated that such violations by foreign countries “may” have occurred, raising the prospect that termination of deliveries to or imposition of other penalties on such nations might take place. Section 3(a) of the Arms Export Control Act (AECA) sets the general standards for countries or international organizations to be eligible to receive United States defense articles and defense services provided under this act. It also sets express conditions on the uses to which these defense items may be put. Section 4 of the Arms Export Control Act states that U.S. defense articles and defense services shall be sold to friendly countries “solely” for use in “internal security,” for use in “legitimate self-defense,” to enable the recipient to participate in “regional or collective arrangements or measures consistent with the Charter of the United Nations,” to enable the recipient to participate in “collective measures requested by the United Nations for the purpose of maintaining or restoring international peace and security,” and to enable the foreign military forces “in less developed countries to construct public works and to engage in other activities helpful to the economic and social development of such friendly countries.” Section 3(c)(2) of the Arms Export Control Act requires the President to report promptly to the Congress upon the receipt of information that a “substantial violation” described in Section 3(c)(1) of the AECA “may have occurred.” This Presidential report need not reach any conclusion regarding the possible violation or provide any particular data other than that necessary to illustrate that the President has received information indicating a specific country may have engaged in a “substantial violation” of an applicable agreement with the United States that governs the sale of U.S. defense articles or services. Should the President determine and report in writing to Congress or if Congress determines through enactment of a joint resolution pursuant to Section 3(c)(3)(A) of the Arms Export Control Act that a “substantial violation” by a foreign country of an applicable agreement governing an arms sale has occurred, then that country becomes ineligible for further U.S. military sales under the AECA. This action would terminate provision of credits, loan guarantees, cash sales, and deliveries pursuant to previous sales. Since the major revision of U.S. arms export law in 1976, neither the President nor the Congress have actually determined that a violation did occur thus necessitating the termination of deliveries or sales or other penalties set out in Section 3 of the Arms Export Control Act. The United States Government has other options under the Arms Export Control Act to prevent transfer of defense articles and services for which valid contracts exist short of finding a foreign country in violation of an applicable agreement with the United States. These options include suspension of deliveries of defense items already ordered and refusal to allow new arms orders. The United States has utilized at least one such option against Argentina, Israel, Indonesia, and Turkey.

Mar 6, 2012

R42398Constitutional Questions

Medical Marijuana: The Supremacy Clause, Federalism, and the Interplay Between State and Federal Laws

Mar 6, 2012

R42386Constitutional Questions

Mandatory Minimum Sentencing for Federal Sex Offenses: An Overview

Sex offenses are usually state crimes. Federal law, however, outlaws sex offenses when they occur on federal lands or in federal prisons, when they involve interstate or foreign travel, or when they involve child pornography whose production or distribution is associated in some way with interstate or foreign commerce. Mandatory minimum terms of imprisonment attend conviction for any of several of these federal sex crimes. The most severe mandatory minimum sentences have been reserved for aggravated sexual assaults committed in federal enclaves or federal prisons, for sex offenses resulting in death, and for sex crimes committed against children by repeat offenders. Two-thirds of the federal trial judges responding to a U.S. Sentencing Commission survey questioned the severity of the mandatory minimum penalties required for receipt of child pornography (5 years; 15 years for repeat offenders). The Commission’s report suggested that the perception may lead to inconsistent sentencing in child pornography cases. It explained that more study would be required before it could make any specific recommendations concerning mandatory minimum sentencing in sex offenses. The constitutional authority to enact federal sex offense punishable by mandatory minimum terms of imprisonment is not unlimited. The ex post facto and double jeopardy clauses; the Fifth Amendment’s equal protection component; the Eighth Amendment’s cruel and unusual punishment clause; the separation of powers and the reservation of powers principles—all establish boundaries that must be honored. Nevertheless, few defendants have successfully challenged the constitutionality of a mandatory minimum term of imprisonment imposed following their conviction for a federal sex offense. This report is available in an abridged version as CRS Report R42387, Mandatory Minimum Sentencing for Federal Sex Offenses: An Abridged Overview, without the footnotes or citations to authority found here.

Mar 2, 2012

R42374

Oil and Natural Gas Industry Tax Issues in the FY2013 Budget Proposal

Mar 2, 2012

R42383Constitutional Questions

Budget Process Reform: Proposals and Legislative Actions in 2012

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

Mar 2, 2012

R42375Energy Policy

H.R. 1837—The Sacramento-San Joaquin Valley Water Reliability Act

For most of the last 20 years, some water contractors in California have received less than their full contract water supplies from federal and state facilities. Although such allocations are in part the result of the prior appropriation doctrine in western water law and are consistent with the expectation of a “junior” water user in times of drought, tensions over water delivery reliability have been exacerbated by reductions in deliveries even in non-drought years. Such reductions are significant because much of the California urban and agricultural economy operates under junior water rights, and reductions in water allocations can cause significant disruption and economic loss for individual farmers and communities, particularly in drought years. At the same time, fish populations throughout the Central Valley of California have dramatically declined due to water diversions and other factors, and have been accompanied by significant losses for fishing communities and others dependent on fish and wildlife resources. The state and federal governments have been working to address water supply reliability and ecosystem issues through pursuit of a Bay-Delta Conservation Plan (BDCP); however, the plan is not complete and remains controversial. On February 16, 2012, the House Natural Resources Committee ordered reported H.R. 1837, the Sacramento-San Joaquin Valley Water Reliability Act. Proponents of H.R. 1837 argue that implementation of the Central Valley Project Improvement Act of 1992 (CVPIA) and state and federal environmental laws (e.g., the federal Endangered Species Act and its state equivalent) have compounded the impact of drought on water deliveries; the bill is designed to remedy these effects. Others argue that the bill would harm the environment and resource-dependent local economies, particularly coastal communities. Some also argue that it would undermine efforts to resolve environmental and water supply reliability issues through development of the BDCP. At issue for Congress is the extent to which the bill changes decades of federal and state law, including state and federal environmental laws, and at what benefit and cost. For example, there are tradeoffs embedded in the bill’s preemption of state water law, including fish and wildlife protections, as a means to increase the water deliveries to some irrigation contractors and municipalities. It appears these changes likely would most benefit water contractors in the southern portion of the CVP service area, but might harm others and potentially reduce environmental protections and improvements and the services and industries they support (e.g., recreational and fishing industries). What impact such tradeoffs might have on other stakeholders is unclear. H.R. 1837 would preempt “any” (including state and federal) law pertaining to operation of the federal Central Valley Project (CVP) and California’s State Water Project (SWP) and substitute for those laws operational principles from a 1994 interim agreement, originally supported by many diverse parties, known as the Bay-Delta Accord. The bill also addresses other California water management issues, making significant changes to the San Joaquin River Restoration Settlement Act and allowing early repayment of CVP construction cost obligations. While much attention has been paid to the effects of federal and state environmental laws on reductions in water supplies south of the Sacramento and San Joaquin Rivers delta confluence with San Francisco Bay (Bay-Delta, or Delta), the extent to which the bill would relieve water supply shortages, particularly in drought years, is uncertain. For example, many factors affect pumping restrictions and the overall water allocation regime for CVP contractors. The federal ESA and CVPIA are only two factors in the regime. Other key factors include state water quality regulations (particularly flow and salinity requirements in the Delta), SWP pumping, and state water rights. How H.R. 1837 would in practice affect these factors remains uncertain.

Feb 29, 2012

R42377Economic Policy

The Eurozone Crisis: Overview and Issues for Congress

The Eurozone's economic crisis threatens economic stability in Europe and beyond. Four specific economic challenges faced are high debt levels and public deficits, weaknesses in the European banking system, recession and high unemployment in some Eurozone countries, and persistent trade imbalances. Three issues for Congress regarding these challenges are how this situation will impact the US economy, IMG involvement, and how the US and Europe will cooperate to solve these issues.

Feb 29, 2012

R42379

Changes to the Government Performance and Results Act (GPRA): Overview of the New Framework of Products and Processes

On January 4, 2011, the GPRA Modernization Act of 2010 (GPRAMA) became law. The acronym “GPRA” in the act’s short title refers to the Government Performance and Results Act of 1993 (GPRA 1993), a law that GPRAMA substantially modified. When GPRA 1993 was enacted, it was regarded as a watershed for the federal government. For the first time, Congress established statutory requirements for most agencies to set goals, measure performance, and submit related plans and reports (hereafter, “products”) to Congress for its potential use. After a four-year phase-in period for GPRA 1993 and 13 years of the law’s full implementation, GPRAMA makes substantial changes. Among other things, GPRAMA continues three agency-level products from GPRA 1993, but with changes; establishes new products and processes that focus on goal-setting and performance measurement in policy areas that cut across agencies; brings attention to using goals and measures during policy implementation; increases reporting on the Internet; and requires individuals to be responsible for some goals and management tasks. In making these changes, GPRAMA aligns the timing of many products to coincide with presidential terms and budget proposals. The law also includes more central roles for the Office of Management and Budget (OMB), an entity that often seeks to advance the President’s policy preferences. GPRAMA also contains more specific requirements for consultations with Congress. By design, many of GPRAMA’s products are required to be submitted to Congress for scrutiny and potential use. The law also provides opportunities for Congress and non-federal stakeholders to influence how agencies and OMB set goals and assess performance. This report provides an overview of GPRAMA’s products and processes. In addition, the report highlights potential issues for Congress. Related questions that Congress might consider include the following: Are agencies’ and OMB’s consultations with Congress working well? Are agencies and OMB defining goals and assessing performance in ways that reflect underlying statutes and congressional intent? Are the representations that agencies and OMB make about government performance perceived by Congress, federal personnel, and the public as credible and useful? What are the implications of evidence that is presented? Are agencies and OMB implementing GPRAMA with desired levels of transparency and public participation? Are agencies, OMB, and Congress focusing effectively on crosscutting policy areas to better coordinate efforts and reduce any unnecessary duplication? Are agencies and OMB implementing GPRAMA in a responsive, effective manner? Is GPRAMA working well? If not, what might be done? This report will be updated as events warrant.

Feb 29, 2012

R41988Economic Policy

The Section 199 Production Activities Deduction: Background and Analysis

In 2004, Congress added the Section 199 domestic production activities deduction to the Internal Revenue Code (IRC). The deduction was intended to achieve a number of policy goals, including compensating for repeal of the extraterritorial income (ETI) export-subsidy provisions, supporting the domestic manufacturing sector, and reducing effective corporate tax rates. Under current law, qualified activities are eligible for a deduction equal to 9% of the lesser of taxable income derived from qualified production activities, or taxable income. Eligible income includes that derived from the production or property that was manufactured, produced, grown, or extracted within the United States. Electricity, natural gas, and potable water production is also eligible, as is film production. Domestic construction projects, as well as engineering and architectural services associated with such projects, also qualify. Overall, roughly one-third of corporate activity qualifies for the deduction. In 2008, 66% of corporate claims of the Section 199 deduction were attributable to the manufacturing sector. Another 12% of the value of corporate claims came from the information sector, while 7% were attributable to the mining sector. Other large sectors of the economy, such as finance and insurance as well as wholesale and retail trade, had few Section 199 claims, relative to their contribution towards economic activity. In practice, the Section 199 deduction reduces corporate tax rates for certain selected industries. Providing a tax break for certain industries can distort the allocation of capital in the economy, reducing economic efficiency and total economic output. Economic efficiency could be enhanced by repealing the Section 199 deduction and using the additional revenues to offset the cost of reducing corporate tax rates. Repealing the Section 199 deduction could allow for a revenue-neutral corporate tax rate reduction of an estimated 1.2 percentage points. For companies currently claiming the Section 199 deduction, repeal of the deduction in exchange for a reduced corporate tax rate could lead to increased effective tax rates. Under current law, activities eligible for the deduction receive a tax break equal to 3.15 percentage points. Further, the deduction can currently be claimed by pass through entities, including S corporations and partnerships, that would not benefit from a reduction in the corporate tax rate. Repeal of corporate tax expenditures, which could include the Section 199 deduction, has been part of the tax reform proposals put forth by the Fiscal Commission, Debt Reduction Task Force, and Gang of Six. The Obama Administration’s FY2013 Budget proposes to repeal the Section 199 deduction for oil and gas related income, using the added revenues to double the deduction for advanced technology manufacturing activities. The President’s framework for business tax reform also proposes modifications to the Section 199 deduction. Repeal of the Section 199 deduction for certain activities has been considered by the 112th Congress. The Senate voted not to advance legislation to repeal the Section 199 deduction for large oil and gas companies (S. 940). Repealing the Section 199 deduction for the oil and gas sector, or for certain firms in the sector, might help to eliminate tax-induced investment distortions caused by the deduction for those sectors. The deduction would continue to distort economic activity for sectors that are still eligible. Given the inefficiencies associated with the Section 199 deduction, repeal could be an economic efficiency enhancing component of a base-broadening, rate-reducing, corporate tax reform.

Feb 27, 2012

R42388Appropriations

The Congressional Appropriations Process: An Introduction

Feb 23, 2012

R42367Constitutional Questions

Federalism Challenge to Medicaid Expansion Under the Affordable Care Act: Florida v. Department of Health and Human Services

Feb 21, 2012

R42365American Law

Representatives and Senators: Trends in Member Characteristics Since 1945

Questions about the characteristics of Members of Congress, including their age, education, previous occupations, and other descriptors, are of ongoing interest to Members, congressional staff, and constituents. Some of these questions may be asked in the context of representation, in efforts to evaluate the extent to which Members of Congress reflect their constituencies and the nation at large. In other instances, questions arise about how the characteristics of Members have changed over time, which may speak in part to the history of Congress. This report provides profiles of Senators and Representatives in selected Congresses since 1945. It includes data based on Representatives and Senators serving on the first day of the 79th, 82nd, 87th, 92nd, 97th, 102nd, and 107th–112th Congresses for several demographic characteristics, as well as the tenure of Member service in Congress. The characteristics discussed include age, including the oldest and youngest Members of the House and Senate; congressional service tenure; sex; previous occupation; race and ethnicity; education; religion; and military service.

Feb 17, 2012

R42359Economic Policy

Who Earns Pass-Through Business Income? An Analysis of Individual Tax Return Data

Pass-through businesses—sole proprietorships, partnerships, and S corporations—generate more than half of all business income in the United States. Pass-through income is, in general, taxed only once at the individual income tax rates when it is distributed to its owners. In contrast, the income of C corporations is taxed twice; once at the corporate level according to corporate tax rates, and then a second time at the individual tax rates when shareholders receive dividend payments or realize capital gains. This leads to the so-called “double taxation” of corporate profits. This report analyzes individual tax return data to determine who earns pass-through business income and bears the burden of taxes on that income. The analysis finds that over 82% of net pass-through income is earned by taxpayers with an adjusted gross income (AGI) over $100,000, although these taxpayers account for just 23% of returns filed. A significant fraction of pass-through income is concentrated among upper-income earners. Taxpayers with AGI over $250,000, for example, receive 62% of pass-through income, but account for just over 6% of returns with pass-through income. A closer look at S corporations and partnerships shows passive income accounts for 10% and 25%, respectively, of their total income. This analysis, when combined with research on the corporate tax burden, suggests that higher-income taxpayers will generally bear most of the burden from increased pass-through taxes. A number of proposed and scheduled tax changes would result in pass-throughs paying higher taxes. Several lawmakers and the Obama Administration, for example, have expressed interest in taxing large pass-throughs as corporations, which would subject some pass-throughs to an additional layer of taxation. Pass-through taxation could also increase if a tax reform that includes lower corporate tax rates that are paid for by the elimination or reduction of certain business tax benefits is enacted. Additionally, the scheduled expiration of the 2001/2003 tax cuts at the end of this year could increase taxes on pass-throughs by increasing individual tax rates. Lastly, a new 3.8% tax on passive income that was enacted as part of the Health Care and Education Reconciliation Act of 2010 (HCERA, P.L. 111-152) is set to take effect in 2013. The tax may apply to some pass-throughs. While the analysis of these proposed and scheduled changes suggests that higher-income taxpayers will generally bear most of the burden from increased pass-through taxes, there are circumstances that could raise congressional concern. For example, an across-the-board expiration of the 2001/2003 individual tax rates will increase taxes for all pass-through owners. One option for preventing the tax burden from increasing for lower and middle class business owners is to allow the reduced rates to expire only for higher-income earners. Concern has also risen over the new 3.8% tax on passive income and its effect on pass-throughs. The distributional analysis in this report shows, however, most S corporation and partnership income is the active type, and active business income is exempt from the 3.8% tax. The share of income that is passive, and potentially subject to the new tax, overwhelmingly accrues to higher-income taxpayers—77% of passive partnership income and 93% of passive S corporation income went to taxpayers with AGI over $250,000. Sole proprietors could generally be expected to be exempt from the tax since most of their income is likely active.

Feb 16, 2012

R42103

Extending the Temporary Payroll Tax Reduction: A Brief Description and Economic Analysis

Feb 14, 2012

R42363Appropriations

Burma's Political Prisoners and U.S. Sanctions

The installation of the Union Government in 2011 and the undertaking of initial reforms have raised the prospects for the resumption of a democratically elected civilian government in Burma after five decades of military rule. The release of Burma's political prisoners has a central role in U.S. policy and Burma's political future. Many of the U.S. sanctions on Burma were implemented after Burma's ruling military junta suppressed protests and detained many political prisoners. In addition, the removal of many of the existing U.S. sanctions requires the release of all political prisoners in Burma.

Feb 13, 2012

R42352American Law

An Examination of Federal Disaster Relief Under the Budget Control Act

This report addresses traditional funding for major disaster declarations, workings of the President's Disaster Relief Fund, a basic overview of how disaster assistance is appropriated, what factors affect how much the federal government spends on disasters, how disaster relief is impacted by the Budget Control Act (BCA) of 2011, and what the policy implications are for disaster assistance under the constraints of the BCA, and the increasing number of disaster declarations and both the possible causes and likely cost implications of a greater number of declarations.

Feb 10, 2012

R42354

Patent Infringement and Experimental Use Under the Hatch-Waxman Act: Current Issues

Feb 9, 2012

R42351Foreign Affairs

Internet Governance and the Domain Name System: Issues for Congress

As the Internet grows and becomes more pervasive in all aspects of modern society, the question of how it should be governed becomes more pressing. Currently, an important aspect of the Internet is governed by a private sector, international organization called the Internet Corporation for Assigned Names and Numbers (ICANN), which manages and oversees some of the critical technical underpinnings of the Internet such as the domain name system and Internet Protocol (IP) addressing. ICANN makes its policy decisions using a multistakeholder model of governance, whereby a “bottom-up” collaborative process is open to all constituencies of Internet stakeholders. A key issue for Congress is whether and how the U.S. government should continue to maximize U.S. influence over ICANN's multistakeholder Internet governance process, while at the same time effectively resisting proposals for an increased role by international governmental institutions such as the U.N. The outcome of this debate will likely have a significant impact on how other aspects of the Internet may be governed in the future, especially in such areas as intellectual property, privacy, law enforcement, Internet free speech, and cybersecurity. Looking forward, the institutional nature of Internet governance could have far reaching implications on important policy decisions that will likely shape the future evolution of the Internet.

Feb 9, 2012

R42344Foreign Affairs

Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis

The Trans-Pacific Partnership (TPP) is a proposed regional free trade agreement (FTA) currently under negotiation between Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam. The negotiating partners have expressed an interest in allowing this proposed “living agreement” to cover new trade topics and to include new members that are willing to adopt the proposed agreement's high standards. This report provides a comparative economic analysis of the TPP countries and their economic relations with the United States. It suggests that the TPP negotiating partners encompass great diversity in population, economic development, and trade and investment patterns with the United States. This economic diversity and inclusion of fast-growing emerging markets presents both opportunities and challenges for the United States in achieving a comprehensive and high standard regional FTA among TPP countries.

Feb 8, 2012

R42346Energy Policy

Federal Land Ownership: Overview and Data

Numerous issues affecting federal land management are before Congress. They include the extent of federal ownership, and whether to decrease, maintain, or increase the amount of federal holdings; the condition of currently owned federal infrastructure and lands, and the priority of their maintenance versus new acquisitions; the optimal balance between land use and protection, and whether federal lands should be managed primarily to produce national or local benefits; and border control on federal lands along the southwest border.

Feb 8, 2012

R42341National Defense

Sourcing Policy: Selected Developments and Issues

Dating back to the 1950s, federal sourcing policy generally has focused on the premise that the government should rely on the private sector for the provision of certain goods and services. Additionally, it has centered around guidance for conducting public-private competitions to determine whether federal employees, or contractor employees, should be selected to perform certain agency functions. The Administration of President George W. Bush, in particular, emphasized subjecting eligible agency functions to public-private competitions. Branding this policy, and related guidance, as competitive sourcing, the Bush Administration included it as one component of the President’s Management Agenda. During the Administration of President Barack Obama, another strain, or facet, of sourcing policy surfaced. Labeled multi-sector workforce management by the Administration, it posits that federal agencies might be susceptible to overreliance on contractors, which could affect the ability of agencies to maintain control over their missions and operations. OMB’s July 2009 memorandum provides guidance to agencies on how to manage their multi-sector workforces. The Office of Federal Procurement Policy’s Policy Letter 11-01—by providing a single, consistent definition of inherently governmental and guidance for identifying and managing inherently governmental functions, functions closely associated with inherently governmental functions, and critical functions—complements the Administration’s multi-sector workforce management policy. This letter was issued in September 2011. Congressional interest in sourcing policy, generally, has been evident for some time. For example, in 1998, the Federal Activities Inventory Reform (FAIR) Act (P.L. 105-270) was signed into law. It requires certain federal agencies to compile, and submit annually to OMB, inventories of their commercial activities, which are activities that may be performed by federal employees or a government contractor. Recent signs of interest in sourcing policy include two substantively similar but identically titled bills that were introduced during the 112th Congress. H.R. 1474 and S. 785, the Freedom From Government Competition Act, contain provisions that would expand upon existing policies designed to encourage federal government reliance on the private sector for the provision of both goods and services. This report provides an overview of the evolution of federal sourcing policy to date and identifies the major policy issues before Congress. It is not a legislation tracking report. This report will be updated as events warrant.

Feb 7, 2012

R42016Intelligence and National Security

Prosecution of Public Corruption: An Overview of Amendments Under H.R. 2572 and Title II of the STOCK Act

Feb 6, 2012

R42338Constitutional Questions

Smart Meter Data: Privacy and Cybersecurity

Fueled by stimulus funding in the American Recovery and Reinvestment Act of 2009 (ARRA), electric utilities have accelerated their deployment of smart meters to millions of homes across the United States with help from the Department of Energy’s Smart Grid Investment Grant program. As the meters multiply, so do issues concerning the privacy and security of the data collected by the new technology. This Advanced Metering Infrastructure (AMI) promises to increase energy efficiency, bolster electric power grid reliability, and facilitate demand response, among other benefits. However, to fulfill these ends, smart meters must record near-real time data on consumer electricity usage and transmit the data to utilities over great distances via communications networks that serve the smart grid. Detailed electricity usage data offers a window into the lives of people inside of a home by revealing what individual appliances they are using, and the transmission of the data potentially subjects this information to interception or theft by unauthorized third parties or hackers. Unforeseen consequences under federal law may result from the installation of smart meters and the communications technologies that accompany them. This report examines federal privacy and cybersecurity laws that may apply to consumer data collected by residential smart meters. It begins with an examination of the constitutional provisions in the Fourth Amendment that may apply to the data. As we progress into the 21st century, access to personal data, including information generated from smart meters, is a new frontier for police investigations. The Fourth Amendment generally requires police to have probable cause to search an area in which a person has a reasonable expectation of privacy. However, courts have used the third-party doctrine to deny protection to information a customer gives to a business as part of their commercial relationship. This rule is used by police to access bank records, telephone records, and traditional utility records. Nevertheless, there are several core differences between smart meters and the general third-party cases that may cause concerns about its application. These include concerns expressed by the courts and Congress about the ability of technology to potentially erode individuals’ privacy. If smart meter data and transmissions fall outside of the protection of the Fourth Amendment, they may still be protected from unauthorized disclosure or access under the Stored Communications Act (SCA), the Computer Fraud and Abuse Act (CFAA), and the Electronic Communications Privacy Act (ECPA). These statutes, however, would appear to permit law enforcement to access smart meter data for investigative purposes under procedures provided in the SCA, ECPA, and the Foreign Intelligence Surveillance Act (FISA), subject to certain conditions. Additionally, an electric utility’s privacy and security practices with regard to consumer data may be subject to Section 5 of the Federal Trade Commission Act (FTC Act). The Federal Trade Commission (FTC) has recently focused its consumer protection enforcement on entities that violate their privacy policies or fail to protect data from unauthorized access. This authority could apply to electric utilities in possession of smart meter data, provided that the FTC has statutory jurisdiction over them. General federal privacy safeguards provided under the Federal Privacy Act of 1974 (FPA) protect smart meter data maintained by federal agencies, including data held by federally owned electric utilities. A companion report from CRS focusing on policy issues associated with smart grid cybersecurity, CRS Report R41886, The Smart Grid and Cybersecurity—Regulatory Policy and Issues, by Richard J. Campbell, is also available.

Feb 3, 2012