Open CRS: Recently Added

Possible Federal Revenue from Oil Development of ANWR and Nearby Areas

Fri, 27 Jun 2008 23:17:50 GMT

Recent high petroleum prices, and the related economic burden on consumers and energy-intensive industries, has raised the issue of stimulating domestic supplies of crude oil. One possible source is the coastal plain of the Arctic National Wildlife Refuge (ANWR), which is estimated to contain significant quantities of oil and gas. Interest in developing the ANWR oil resources has also focused on the revenues that the federal government could collect should exploration and development be successful. Some observers have suggested using such revenues for purposes such as providing relief to petroleum consumers, further subsidizing energy conservation measures, or reducing federal budget deficits. However, current federal law prohibits the production of oil and gas in ANWR. Federal revenues would consist primarily of corporate income taxes on profits earned by oil producers from the production and sale of ANWR oil. As landowner, the federal government would also collect royalties from such production on federal lands, which are included in the estimates. If producers were able to recover 10.3 billion barrels of oil over the life of the properties -- the United States Geological Survey has estimated there is a 50-50 chance that the ANWR coastal plain contains at least this amount of oil -- and if oil prices are $125/barrel, then the federal government might be able to collect $191 billion in revenues over the production period, estimated to be at least 30 years once production commences. This estimate consists of nearly $132 billion in federal corporate income taxes, and about nearly $59 billion in federal royalties. These estimates are subject to major limitations. Estimates of technologically recoverable oil used in this report include the resources from the federal lands, and assume the availability of resources in Native lands in the Refuge and offshore state lands. The Alaska Statehood Act would allot 90% of gross royalties to the state and 10% to the federal government. The federal government would collect revenues from bonus bids from federal leases, and rents on undeveloped leases. These are not estimated separately by CRS. Independent estimates by the Congressional Budget Office for President Bush's FY2009 budget proposal show estimated bonus bid revenues of $6 billion between FY2011 and FY2018. Finally, income tax revenues from the secondary feedback effects would also increase as a result of the stimulus to general economic activity. However, these revenues are not included here due to the difficulty in estimation over the projection time horizon.

Veterans Benefits: An Overview

Fri, 27 Jun 2008 23:17:39 GMT

The Department of Veterans Affairs (VA) offers a wide range of benefits and services to eligible veterans, members of their families, and survivors of deceased veterans. VA programs include disability compensation and pensions, readjustment benefits, and health care programs. The VA also provides life insurance, burial benefits, housing and other loan guaranty programs, and special counseling and outreach programs. While eligibility for specific benefits varies, veterans generally must meet requirements related to discharge type and length of active duty military service. This report provides an overview of major VA benefits and the VA budget. It will be updated as events warrant.

Wind Power in the United States: Technology, Economic, and Policy Issues

Fri, 27 Jun 2008 23:17:30 GMT

Rising energy prices and concern over greenhouse gas emissions have focused congressional attention on energy alternatives, including wind power. Although wind power currently provides only about 1% of U.S. electricity needs, it is growing more rapidly than any other energy source. In 2007, over 5,000 megawatts of new wind generating capacity were installed in the United States, second only to new natural gas-fired generating capacity. Wind power has become "mainstream" in many regions of the country, and is no longer considered an "alternative" energy source. Wind energy has become increasingly competitive with other power generation options. Wind technology has improved significantly over the past two decades. CRS analysis presented here shows that wind energy still depends on federal tax incentives to compete, but that key uncertainties like climate policy, fossil fuel prices, and technology progress could dominate future cost competitiveness. A key challenge for wind energy is that electricity production depends on when winds blow rather than when consumers need power. Wind's variability can create added expenses and complexity in balancing supply and demand on the grid. Recent studies imply that these integration costs do not become significant (5-10% of wholesale prices) until wind turbines account for 15-30% of the capacity in a given control area. Another concern is that new transmission infrastructure will be required to send the wind-generated power to demand centers. Building new lines can be expensive and time-consuming, and there are debates over how construction costs should be allocated among end-users and which pricing methodologies are best. Opposition to wind power arises for environmental, aesthetic, or aviation security reasons. New public-private partnerships have been established to address more comprehensively problems with avian (bird and bat) deaths resulting from wind farms. Some stakeholders oppose the construction of wind plants for visual reasons, especially in pristine or highly-valued areas. A debate over the potential for wind turbines to interfere with aviation radar emerged in 2006, but most experts believe any possible problems are economically and technically manageable. Federal wind power policy has centered primarily on the production tax credit (PTC), a business incentive to operate wind facilities. The PTC is set to expire on December 31, 2008. Analysts and wind industry representatives argue that the onagain off-again nature of the PTC is inefficient and leads to higher costs for the industry. While there is often bipartisan support for the PTC in Congress, debate centers more fundamentally on how to offset its revenue losses. A federal renewable portfolio standard -- which would mandate wind power levels -- was rejected in the Senate in late 2007; its future is uncertain. If wind is to supply up to 20% of the nation's power by 2030, as suggested by a recent U.S. Department of Energy report, additional federal policies will likely be required to overcome barriers, and ensure development of an efficient wind market.

Iran's Nuclear Program: Status

Fri, 27 Jun 2008 23:17:21 GMT

Although Iran claims that its nuclear programs are exclusively for peaceful purposes, they have generated considerable concern that Tehran is pursuing a nuclear weapons program. Indeed, the UN Security Council has responded to Iran's refusal to suspend work on its uranium enrichment and heavy-water nuclear reactor programs by adopting several resolutions, most recently in March 2008, which imposed sanctions on Tehran. Despite this pressure, Iran continues at its Natanz centrifuge facility to enrich uranium, expand the number of operating centrifuges, and conduct research on new types of centrifuges. Tehran has also continued to produce centrifuge feedstock, as well as work on its heavy-water reactor and associated facilities. Whether Iran is pursuing a nuclear weapons program is, however, unknown. A National Intelligence Estimate made public in December 2007 assessed that Tehran "halted its nuclear weapons program," defined as "Iran's nuclear weapon design and weaponization work and covert uranium conversion-related and uranium enrichmentrelated work," in 2003. The estimate, however, also assessed that Tehran is "keeping open the option to develop nuclear weapons" and that any decision to end a nuclear weapons program is "inherently reversible." Although Iran has cooperated with the International Atomic Energy Agency (IAEA) to an extent, the agency says that Tehran has not gone far enough to alleviate all of the agency's concerns about Iran's enrichment and heavy-water reactor programs. The IAEA continues to investigate the program, particularly evidence that Tehran may have conducted procurement activities and research directly applicable to nuclear weapons development. This report will be updated as necessary.

International Drug Control Policy

Fri, 27 Jun 2008 23:17:14 GMT

This report provides an overview of U.S. international drug control policy. It describes major international counternarcotics initiatives and evaluates the broad array of U.S. drug control policy tools currently in use. The report also considers alternative counterdrug policy approaches to international drug control initiatives and raises several counterdrug policy issues and considerations for policy makers. Illegal drugs refer to narcotic, psychotropic, and related substances whose production, sale, and use are restricted by domestic law and international drug control agreements. The most common illegal drugs include cannabis, cocaine, opiates, and synthetic drugs. International trade in these drugs represents a lucrative and what at times seems to be an intractable criminal enterprise, affecting countries worldwide and generating between $100 billion and $1 trillion in illicit profits per year. Revenue from the illegal drug industry provides international drug trafficking organizations with the resources to evade and compete with law enforcement officials; penetrate legitimate economic structures through money laundering; and, in some instances, challenge the authority of national governments. Congress is involved in all aspects of U.S. international drug control policy, regularly appropriating funds for counterdrug initiatives, conducting oversight activities on federal counterdrug programs, and legislating changes to agency authorities and other counterdrug policies. U.S. programs to combat drug production and trafficking exist in the Andean region of South America, Afghanistan, and other areas of concern. Congress is also considering a proposed multiyear, $1.4 billion security assistance package to enhance existing U.S. efforts to combat drug trafficking and related criminal activity in Mexico and Central America. Despite apparent national resolve to address international narcotics trafficking, tensions appear between U.S. international drug control policy and other U.S. foreign policy goals and concerns. Pursuit of international drug control policies can sometimes negatively affect national interests by exacerbating political instability and economic dislocation in countries where narcotics production is entrenched economically and socially. Drug supply interdiction programs and U.S. systems to facilitate the international movement of legitimate goods, people, and wealth also are often at odds. The high priority of terrorism in U.S. foreign policy has resulted in increased attention to links between drug and terror groups; a challenge facing policy makers, however, is how to avoid diverting counterdrug resources for anti-terror ends in areas of potentially low payoff. This report expands and replaces RL33582, International Drug Trade and U.S. Foreign Policy, by Raphael F. Perl. It will be updated periodically.

Commerce, Justice, Science and Related Agencies: FY2009 Appropriations

Fri, 27 Jun 2008 23:17:00 GMT

This report monitors actions taken by the 110th Congress for the FY2009 Commerce, Justice, Science, and Related Agencies (CJS) appropriations bill. On June 12, 2008, the House CJS Appropriations Subcommittee approved an FY2009 CJS appropriations bill that includes $5.1 billion more than the FY2008 enacted amount and $3.1 billion more than the FY2009 request, or about $59.7 billion in total funding ($56.8 billion in discretionary funding). The House subcommittee mark includes $8.7 billion for the Department of Commerce (DOC), $25.4 billion for the Department of Justice (DOJ), $24.7 billion for science agencies, among other amounts. The Administration's FY2009 request initially included $56.563 billion for those departments and agencies funded through the CJS appropriation, or $1.926 billion more than the enacted FY2008 appropriation of $54.637 billion (a 3.5% increase). For the DOC, the FY2009 request included $8.217 billion, or $1.360 billion more than the enacted FY2008 level (a 19.8% increase). The Census Bureau, however, is facing substantial funding shortfalls due to equipment failures associated with the 2010 decennial census. Congress is considering an FY2008 supplemental appropriations bill (H.R. 2642) that includes an additional $210 million for Census. Also, the Administration submitted a budget amendment on June 9, 2008 that provides an additional $546 million for the 2010 Census, partly offset by cancelling $111 million in other Department of Commerce accounts and shifting amounts within the Census Bureau account. For the DOJ, the FY2009 request includes $23.089 billion, or $503 million less than the enacted FY2008 level (a 2.1% decrease). This decrease largely reflects a proposed reduction of $1.542 billion in funding for state and local law enforcement assistance, which was funded at $2.411 billion for FY2008. However, the FY2008 request also includes increases of $492.7 million for national security investigations, $100 million for a Southwest border crime fighting initiative, and $67.1 million to support essential federal detention and incarceration programs. In addition, the Administration has requested $185.8 million in FY2008 supplemental funding for DOJ counterterrorism activities and programs. By comparison, the House-passed FY2008 supplemental appropriations bill would provide DOJ with $407.3 million, and Senate-passed bill would provide $1.131 billion. For science agencies, the FY2009 request includes $24.474 billion, or $1.094 billion more than the enacted FY2008 level (a 4.7% increase). Among other things, the FY2009 request includes $396.8 million for the NSF and the National Nanotechnology Initiative. In addition, the Senate-passed FY2008 supplemental appropriation bill would provide the NASA with $200 million and the NSF with $200 million. For related agencies, the FY2009 request includes $784 million, or nearly $24.8 million less than the enacted FY2008 level (a 3.1% decrease). The Legal Services Commission would absorb this decrease, as the FY2009 request only includes $311 million for the commission, a reduction of $39.5 million, as compared to the commission's enacted FY2008 level of funding.

Clean Water Act: Legislation Concerning Discharges from Recreational Boats

Fri, 27 Jun 2008 23:16:28 GMT

The Environmental Protection Agency is attempting to develop a regulatory response to a 2006 federal court ruling that vacated a long-standing rule that exempts discharges associated with the normal operation of vessels from permit requirements of the Clean Water Act. Concern that this ruling could require millions of recreational boaters to obtain permits has led to the introduction of legislation to exempt such vessels from water quality regulation. This report discusses background to the issue, six bills (S. 2067/H.R. 2550, S. 2766/H.R. 5949, and S. 2645/H.R. 5594), and draft permits proposed by EPA on June 17. In the 110th Congress, legislation concerning the applicability of certain environmental regulatory requirements to recreational boats has been introduced. Two bills are titled the Clean Boating Act of 2008 (S. 2766, Senator Bill Nelson and Senator Boxer; and H.R. 5949, Representative LaTourette). These identical bills have been ordered reported by Senate and House committees. Legislation titled the Recreational Boating Act of 2007 also has been introduced (S. 2067, Senator Martinez; and H.R. 2550, Representative Taylor1). Two other bills are the Vessel Discharge Evaluation and Review Act (S. 2645, Senator Stevens, and H.R. 5594, Representative Young2). These bills are intended to address an issue that has arisen in implementation of the Clean Water Act (CWA). In 2006, a federal court ordered the Environmental Protection Agency (EPA) to revise a CWA regulation that currently exempts discharges from the normal operation of all vessels from the act's permit requirements.3 The bills seek to

Defense: FY2009 Authorization and Appropriations

Fri, 27 Jun 2008 23:16:16 GMT

The annual consideration of appropriations bills (regular, continuing, and supplemental) by Congress is part of a complex set of budget processes that also encompasses the consideration of budget resolutions, revenue and debt-limit legislation, other spending measures, and reconciliation bills. In addition, the operation of programs and the spending of appropriated funds are subject to constraints established in authorizing statutes. Congressional action on the budget for a fiscal year usually begins following the submission of the President?s budget at the beginning of each annual session of Congress. Congressional practices governing the consideration of appropriations and other budgetary measures are rooted in the Constitution, the standing rules of the House and Senate, and statutes, such as the Congressional Budget and Impoundment Control Act of 1974. This report is a guide to one of the regular appropriations bills that Congress considers each year. It is designed to supplement the information provided by the House and Senate Appropriations Subcommittees on Defense. For both defense authorization and appropriations, this report summarizes the status of the bills, their scope, major issues, funding levels, and related congressional activity. This report is updated as events warrant and lists the key CRS staff relevant to the issues covered as well as related CRS products.

Earmark Reform: Comparison of New House and Senate Procedural Rules

Fri, 27 Jun 2008 23:16:11 GMT

During 2007, both the House and Senate established similar new earmark transparency procedures for their respective chambers. They both require public disclosure of approved spending earmarks (as well as limited tariff or tax benefits) and the identification of their congressional sponsors. In addition, they require disclosure of further information from each congressional sponsor, such as a certification that the sponsor has no direct financial interest. Finally, each House also established procedures regarding new spending earmarks added to conference reports. The House established its procedures through adoption of two House resolutions. On January 5, 2007, the House completed action on H.Res. 6 (110th Cong.), adopting the rules of the House, including new provisions in House Rule XXI to require public disclosure of approved earmarks, their sponsors, and the additional information. On June 18, 2007, the House adopted H.Res 491 (110th Cong.), to require transparency for new spending earmarks added to conference reports on regular appropriations bills. The Senate included its new parliamentary rule in the Honest Leadership and Open Government Act of 2007 (P.L. 110-81), which became law on September 14, 2007. This act used the term "congressionally directed spending item" rather than earmark, but is otherwise similar to the House requirement. It also includes a procedure to strike new items of spending added to conference reports. The new House rule generally prohibits consideration of a measure, manager's amendment, or conference report unless a list of earmarks and the name of each sponsoring Member (or a statement that there are no earmarks) is available before consideration. The new Senate rule prohibits a vote on a motion to proceed to consider a measure or a vote on adoption of a conference report, unless the chair of the committee or Majority Leader certifies that a complete list of earmarks and the name of each Senator requesting each earmark is available on a publicly accessible congressional website 48 hours before the vote. Both House and Senate rules require earmark sponsors to provide similar information on each earmark to the committee of jurisdiction, but these rules include different public disclosure requirements regarding the information. Neither requirement is enforced by points of order. In the House, the applicable committee is to make "open to public inspection" the Member's entire written statement on certain approved earmarks. The Senate rule requires the applicable committee to make available on the Internet the certifications of no financial interest. With regard to certain spending earmarks first specified in conference, the House requires public disclosure of those earmarks and the names of those Members that requested each earmark identified. The Senate rule provides a procedure to strike certain new items of spending, including earmarks, from a conference report.

Conservation Reserve Program Payments: Self-Employment Income, Rental Income, or Something Else?

Fri, 27 Jun 2008 23:16:03 GMT

Under the Conservation Reserve Program (CRP), owners and operators of eligible land may enter into a contract with the Secretary of Agriculture to enroll land in the program and convert it to less intensive use under an approved conservation plan. In return, participants receive an annual payment that the statute refers to as "rent." Legislation establishing and extending the program has been silent as to the appropriate tax treatment of these payments. For many years, the Internal Revenue Service (IRS) generally treated the payments as farming income when received by someone who was engaged in the trade or business of farming, but as rental income when received by others. The IRS's position appears to have changed to one that would treat all Conservation Reserve Program payments as farming income and, thus, subject to self-employment tax. Recently, the IRS published a proposed revenue ruling that explains its treatment of CRP payments as income from the trade or business of farming and, thus, subject to self-employment tax. Currently, case law provides some support for the IRS's position that the CRP's annual rental payments are not rent that is excludible from self-employment tax. This case law has not, however, considered CRP payments received by individuals who were not previously engaged in farming and who have purchased property and immediately enrolled it in the CRP (or agreed to continue the enrollment begun by the previous owner/operator). Neither have courts considered CRP payments to those who hire third parties to perform activities required by the CRP contract. The possibility that the payments may not constitute self-employment income even if they do not qualify as excludible rent has not been considered by either the courts or the IRS. Neither has yet considered the statutory requirement that all payments must be returned if the contract is terminated. The Heartland, Habitat, Harvest, and Horticulture Act of 2007 (S. 2242), introduced in the 110th Congress, contained provisions that would exclude CRP payments from self-employment income for some taxpayers and would allow all recipients to choose to receive a tax credit in lieu of the payments. These provisions were incorporated into the 2007 Farm Bill (H.R. 2419), which is in conference. This report outlines the history of the program, the changing positions of the IRS, pertinent case law, and other provisions of the Internal Revenue Code (IRC). Several possible approaches to the taxation of CRP payments are discussed.

Endangered Species Act and Legal Issues Regarding Columbia Basin Salmon and Steelhead

Fri, 27 Jun 2008 23:15:58 GMT

The construction and operation of the Federal Columbia River Power System (FCRPS) have reduced salmon and steelhead populations in the Columbia Basin. In 1991 the Snake River sockeye became the first Pacific salmon stock listed under the Endangered Species Act. Since then, operations of the FCRPS have had to be considered in the context of the ESA. This means that federal operators of the dams, the Bureau of Reclamation, the Bonneville Power Administration, and the Army Corps of Engineers farther upriver are required to consult with the National Marine Fisheries Service (NMFS) on how federal actions may impact species. At the end of the consultation, NMFS issues a biological opinion (BiOp) as to whether the action would jeopardize the continued existence of a species. As part of the consultation process, mitigation measures are recommended by NMFS to avoid harm to listed species. Protective measures for fish often come at a cost in terms of energy generation or irrigation supply, and this conflict between natural resources and energy production and irrigation is at the heart of Columbia Basin conflict. Beginning in 1992, a series of BiOps were issued by NMFS. Courts have found almost all of them inconsistent with the ESA. The 2005 BiOp was remanded to NMFS with the final, updated BiOp released in May 2008. The district court that made the remand indicated that if the final document does not meet ESA standards, the court may vacate the BiOp. This step would mean that FCRPS was not operating in compliance with the ESA, and any harm to a listed species would be an unauthorized "take." The Bonneville Power Administration has offered nearly $1 billion to four Indian tribes to resolve the litigation. However, states, environmental groups, and fishing interests, who also have acted as plaintiffs, were not included in the settlement.

Former NFL Players: Disabilities, Benefits, and Related Issues

Fri, 27 Jun 2008 23:15:47 GMT

Professional football is a very popular sport, and the physical nature of the game of football is part of its appeal, but, at the same time, playing the game can exact a physical and mental toll on players. Violent collisions, as well as other aspects of the sport, can and do cause injuries. Each week during the season, the National Football League (NFL) releases an injury report that lists, for each team, players who are injured, the type or location of the injury (for example, "concussion," "knee," or "ribs"), and the players' status for the upcoming game. During the 2007 season, aside from weeks one and eight, at least 10% of NFL players were identified each week as being injured. Players' injuries and current health conditions (for example, excess weight and sleep apnea) might have long-term consequences for their health, meaning that today's injury might become a chronic health problem or disability during retirement from the NFL. The issue has received considerable attention from Congress, including hearings in both chambers. Through collective bargaining agreement (CBA) negotiations and other discussions, the NFL and the NFL Players Association (NFLPA) have established a number of benefits, including retirement benefits (that is, a pension), severance pay, total and permanent disability benefits, and an annuity program. Some benefits are available to all players, while other benefits are available only to players who played in the NFL during certain years. Additionally, some benefits have eligibility requirements. Funds for benefits that are included in the CBA come from the portion of the league's total revenues that is allocated to the players. Apparently, the NFL and the NFLPA determine how to fund other benefits. The NFL and the NFLPA have taken steps to promote the health and safety of players. The league has established several committees, such as the Mild Traumatic Brain Injury (MTBI) Committee, and, through NFL Charities, awards grants for medical and scientific research related to health and safety issues. The NFLPA has a medical advisor and a performance consultant, and there is an NFL-NFLPA joint committee on player safety. The subject of injuries, disabilities, and benefits is a complex one, and there are a variety of issues surrounding this subject. For example, it has been argued that the way compensation is structured within the NFL might induce an individual to play while injured instead of seeking medical treatment. The oldest retired players might make up a subset with exceptional financial and medical needs, because they (1) might not have been protected as well as current players are; (2) might have received medical care that, while the best available at the time, was not as effective as the care available today; and (3) are not eligible for all of the benefits available to current players. Another issue involves MTBI research and whether multiple concussions might have long-term effects. The NFLPA proposed three legislative options in 2007. Other possibilities include establishing one or more ombudsman offices or taking steps to mitigate the economic risk of injuries and disabilities. This report will be updated as events warrant.

The Export Administration Act: Evolution, Provisions, and Debate

Fri, 27 Jun 2008 23:15:37 GMT

The 108th Congress may consider legislation to rewrite or to reauthorize the Export Administration Act (EAA). H.R. 55 was introduced on January 7, 2003. Through the EAA, Congress delegates to the executive branch its express constitutional authority to regulate foreign commerce. The EAA provides the statutory authority for export controls on sensitive dual-use goods and technologies: items that have both civilian and military applications, including those items that can contribute to the proliferation of nuclear, biological, and chemical weaponry. The EAA, which originally expired in 1989, periodically has been reauthorized for short periods of time, with the last incremental extension expiring in August 2001. At other times and currently, the export licensing system created under the authority of EAA has been continued by the invocation of the International Emergency Economic Powers Act (IEEPA). EAA confers upon the President the power to control exports for national security, foreign policy or short supply purposes. It also authorizes the President to establish export licensing mechanisms for items detailed on the Commerce Control List (CCL), and it provides some guidance and places certain limits on that authority. The CCL currently provides detailed specifications for about 2,400 dual-use items including equipment, materials, software, and technology (including data and know-how) likely requiring some type of export license from the Commerce Department's Bureau of Industry and Security (BIS). BIS administers the Export Administration Regulations (EAR), which, in addition to the CCL, describe licensing policy and procedures such as commodity classification, license applications, and interagency dispute resolution procedures. In the absence of a currently authorized EAA, the EAR is maintained under IEEPA authority.

In debates on export administration legislation, parties often fall into two camps: those who primarily want to liberalize controls in order to promote exports, and those who believe that liberalization may compromise national security goals. While it is widely agreed that exports of some goods and technologies can adversely affect U.S. national security and foreign policy, some believe that current export controls can be detrimental to U.S. businesses and to the U.S. economy. According to this view, the resultant loss of competitiveness, market share, and jobs can harm the U.S. economy, and that harm to particular U.S. industries and to the economy itself can negatively impact U.S. security. Others believe that security concerns must be paramount in the U.S. export control system and that export controls can be an effective method to thwart proliferators, terrorist states, and countries that can threaten U.S. national security interests. Controversies have arisen with regard to particular exports such as high performance computers, encryption technology, stealth materials, satellites, machine tools, "hot-section" aerospace technology, and the issue of "deemed exports." The competing perspectives on export controls have clearly been manifested in the debate over foreign availability and the control of technology, the efficacy of multilateral control regimes, the licensing process and organization of the export control system, and the economic effects of U.S. export controls. This report will be updated periodically.

The Committee on Foreign Investment in the United States (CFIUS)

Fri, 27 Jun 2008 23:15:28 GMT

The Committee on Foreign Investment in the United States (CFIUS) is comprised of 12 members representing major departments and agencies within the federal Executive Branch. While the group generally operates in relative obscurity, the proposed acquisition of commercial operations at six U.S. ports by Dubai Ports World in 2006 placed the group's operations under intense scrutiny by Members of Congress and the public. Prompted by this case, some Members are questioning the ability of Congress to exercise its oversight responsibilities given the general view that CFIUS's operations lack transparency. Other Members are revisiting concerns about the linkage between national security and the role of foreign investment in the U.S. economy. Some Members of Congress and others argue that the nation's security and economic concerns have changed since the September 11, 2001 terrorist attacks and that these concerns are not being reflected sufficiently in the Committee's deliberations. In addition, anecdotal evidence seems to indicate that the CFIUS process may not be market neutral, instead a CFIUS investigation of an investment transaction may be perceived by some firms and by some in the financial markets as a negative factor that adds to uncertainty and may spur firms to engage in behavior that is not optimal for the economy as a whole. Since some Members of Congress focused attention on the Dubai Ports World transaction, more than two dozen measures on foreign investment have been introduced. These measures reflect various levels of unease with the broad discretionary authority Congress has granted CFIUS. As a result, most measures would place new reporting requirements on CFIUS and strengthen Congress's ability to exercise oversight over CFIUS through the federal agencies that comprise the Committee. Such measures as H.R. 4813 and H.R. 4917 would place new reporting requirements on CFIUS to inform Congress when it initiates an investigation of a proposed acquisition, merger, or takeover. Other measures would seek to reduce CFIUS's discretion in deciding whether to investigate a foreign investment transaction. H.R. 4929 would limit CFIUS's discretion by mandating that an investigation must occur for any proposed or pending merger, acquisition, or takeover. H.R. 5337 would make substantial changes to CFIUS and to the ExonFlorio process. H.R. 5337 was approved unanimously, without amendment by the full House, on July 26, 2006. S. 1797 would increase requirements for reporting to Congress, and would require CFIUS to consider the long-term projections of the United States requirements for sources of energy and other critical resources and materials and for economic security. S. 2380 would add a new national security review to the CFIUS process and add the Secretary of Homeland Security and the Secretary of Defense as vice chairs of the Committee. S. 3549 would add to the list of factors CFIUS and the President would consider in taking action against an investment and it would provide for a system of assessing countries as a factor in review or investigating investments. The measure was passed, with amendments, by the full Senate on July 26, 2006. This report will be updated as events warrant.

International Trade: Rules of Origin

Fri, 27 Jun 2008 23:15:12 GMT

Determining the country of origin of a product is important for properly assessing tariffs, enforcing trade remedies (such as antidumping and countervailing duties) or quantitative restrictions (tariff quotas), and statistical purposes. Other commercial trade policies are also linked with origin determinations, such as country of origin labeling and government procurement regulations. Rules of origin (ROO), used to determine the country of origin of merchandise entering the U.S. market, can be very simple, noncontroversial tools of international trade as long as all of the parts of a product are manufactured and assembled primarily in one country. However, when a finished product's component parts originate in many countries, as is often the case in today's global trading environment, determining origin can be a very complex, sometimes subjective, and time-consuming process. U.S. Customs and Border Protection (CBP) is the agency responsible for determining country of origin using various ROO schemes. Non-preferential rules of origin are used to determine the origin of goods imported from countries with which the United States has most-favored-nation (MFN) status. They are the principal regulatory tools for accurate assessment of tariffs on imports, addressing country of origin labeling issues, qualifying goods for government procurement, and enforcing trade remedy actions and trade sanctions. Preferential rules are used to determine the eligibility of imported goods from certain U.S. free trade agreement (FTA) partners and certain developing country beneficiaries to receive duty-free or reduced tariff benefits under bilateral or regional FTAs, trade preference programs (such as the Generalized System of Preferences), and other special import programs. Preferential rules of origin are specific to each FTA, which means that they vary from agreement to agreement and preference to preference. This report deals with ROO in three parts. First, we describe in more detail the reasons that country of origin rules are important and briefly describe U.S. laws and methods that provide direction in making these determinations. Second, we discuss briefly some of the more controversial issues involving rules of origin, including the apparently subjective nature of some CBP origin determinations, and the effects of the global manufacturing process on ROO. Third, we conclude with some alternatives and options that Congress could consider that might assist in simplifying the process. This report will be updated as events warrant.

Exon-Florio Foreign Investment Provision: Comparison of H.R. 556 and S. 1610

Fri, 27 Jun 2008 23:15:02 GMT

During the First Session of the 110th Congress, several Members of Congress have introduced measures in the House and the Senate to address various concerns with foreign investment, especially the proposed purchase of the British-owned P&O Ports by Dubai Ports World in early 2006. Congresswoman Maloney introduced H.R. 556, the National Security Foreign Investment Reform and Strengthened Transparency Act of 2007, on January 18, 2007. The measure was approved by the House Financial Services Committee on February 13, 2007 with amendments, and was approved with amendments by the full House on February 28, 2007 by a vote of 423 to 0. On June 13, 2007, Senator Dodd introduced S. 1610, the Foreign Investment and National Security Act of 2007. On June 29, 2007, the Senate adopted S. 1610 in lieu of H.R. 556 by unanimous consent. On July 11, 2007, the House accepted the Senate's version of H.R. 556 by a vote of 370-45 and sent the measure to the President. Both the House bill and the Senate bill attempt to address six perceived problems with the current statutes that many Members identified during the 109th Congress: 1) that the principal members of the interagency Committee on Foreign Investment in the United States (CFIUS) at times seem not to be well informed of the outcomes of reviews and investigations regarding proposed or pending investment transactions; 2) that CFIUS has interpreted incorrectly the requirements under current statutes for investigations of transactions that involve firms that are owned or controlled by a foreign government; 3) that reporting requirements under current statutes do not provide Congress with enough information about the operations and actions of CFIUS for Members to fulfill their oversight responsibilities; 4) that CFIUS exercises too much discretion in its ability to choose which transactions it investigates; 5) that the definition of national security used by CFIUS is no longer adequate in a post-September 11th world; and 6) that deadlines placed on CFIUS to complete reviews and investigations of investment transactions do not provide adequate time in some instances for the Committee to complete its reviews and investigations. This report provides background information on the Committee on Foreign Investment in the United States and on the Exon-Florio provision. In addition, the report provides an overview of H.R. 556 and S. 1610 and a side-by-side comparison of the two measures. This report will be updated as warranted by events.

Campaign Finance: Legislative Developments and Policy Issues in the 110th Congress

Fri, 27 Jun 2008 23:14:54 GMT

This report provides an overview of major legislative and policy developments related to campaign finance during the 110th Congress. The report discusses legislative and oversight hearings and floor action during the period. It also explores major policy issues that are relevant for Congress, but have largely occurred away from Capitol Hill. As of this writing, approximately 50 bills devoted primarily to campaign finance have been introduced in the 110th Congress, but none have become law. A new lobbying and ethics law, the Honest Leadership and Open Government Act (HLOGA) contains campaign finance provisions related to "bundled" campaign contributions and campaign travel. That measure is the only campaign financerelated bill to become law during the 110th Congress. Aside from HLOGA, the House has passed two bills containing campaign finance provisions. H.R. 2630 would restrict campaign and leadership political action committee (PAC) payments to candidate spouses. In addition, a provision in the House-passed version of an appropriations bill (H.R. 3093) would have prohibited spending Justice Department funds on criminal enforcement of the Bipartisan Campaign Reform Act (BCRA) "electioneering communication" provision. However, the language was not included in the FY2008 consolidated appropriations law (P.L. 110-161). In addition to House legislative activity, in December 2007, the Committee on House Administration held an oversight hearing on automated telephone calls (also known as "robo calls" or "auto calls") in political campaigns. In the Senate, a bill (S. 223) requiring electronic filing of campaign disclosure reports was reported from the Rules and Administration Committee but has not received floor consideration. During the spring and summer of 2007, the committee also held hearings on coordinated party expenditures (S. 1091) and congressional public financing legislation (S. 1285). Two non-legislative items are also particularly noteworthy. First, following a Senate impasse over four nominees to the Federal Election Commission (FEC) during the first session of the 110th Congress, the Commission now has just two sitting members. Under the Federal Election Campaign Act (FECA), that number is insufficient to approve enforcement actions, issue advisory opinions, and make other policy decisions. Additional confirmed or recess-appointed commissioners are necessary to bring the FEC to at least a four-member majority necessary to make policy decisions. Second, in November 2007, the FEC approved new rules regarding electioneering communications. Those rules were promulgated to comport with a June 2007 Supreme Court ruling (in Federal Election Commission v. Wisconsin Right to Life, Inc.). This report will be updated periodically throughout the 110th Congress to reflect major events or legislative action. It supercedes CRS Report RS22732, Campaign Finance: Developments in the 110th Congress

Lobbying Law and Ethics Rules Changes in the 110th Congress

Fri, 27 Jun 2008 23:14:41 GMT

Significant changes were made by Congress to the current lobbying laws, and to internal House and Senate rules on ethics and procedures, by the passage of S. 1, 110th Congress, and the adoption of H.Res. 6, 110th Congress. In the face of mounting public and congressional concern over allegations and convictions of certain lobbyists and public officials in a burgeoning "lobbying and gift" scandal, and with a recognition of legitimate concerns over undue influence and access of certain special interests to public officials, Congress has adopted stricter rules, regulations, and laws attempting to address these issues. This report examines the changes made to law and congressional rule in S. 1, 110th Congress, and changes adopted to internal House rules earlier in the Congress in H.Res. 6. The statutory and internal congressional rule changes which have been adopted address five general areas of reform: (1) broader and more detailed disclosures of lobbying activities by paid lobbyists, and more disclosures concerning the intersection of the activities of professional lobbyists with government policy makers; (2) more extensive restrictions on the offering and receipt of gifts and favors for Members of Congress and their staff, including gifts of transportation and travel expenses; (3) new restrictions addressing the so-called "revolving door,"that is, postgovernment-employment "lobbying" activities by former high-level government officials on behalf of private interests; (4) reform of the government pension provisions with regard to Members of Congress found guilty of abusing the public trust; and (5) greater transparency in the internal legislative process in the House and Senate, including "earmark" disclosures and accountability.

Tax-Exempt Organizations: Political Activity Restrictions and Disclosure Requirements

Fri, 27 Jun 2008 23:14:27 GMT

Recently, significant attention has been paid to the political activities of taxexempt organizations. In particular, the activities of IRC � 501(c)(3) charitable organizations, � 501(c)(4) social welfare organizations, � 501(c)(5) labor unions, � 501(c)(6) trade associations, and � 527 political organizations have been scrutinized. This report discusses the limitations that the Internal Revenue Code places on political activity, including lobbying and campaign intervention, by tax-exempt organizations. It focuses on the above organizations, but also discusses the restrictions on the other types of tax-exempt organizations. The report ends with a summary of the information that tax-exempt organizations must report to the Internal Revenue Service about their political activities and whether the information must be made publicly available.

Acceptance of Gifts by Members and Employees of the House of Representatives Under New Ethics Rules of the 110th Congress

Fri, 27 Jun 2008 23:14:15 GMT

On January 4, 2007, the House adopted new internal House Rules to prohibit the receipt of most gifts by Members and staff from lobbyists, agents of a foreign principals, and certain organizations that employ lobbyists or foreign agents. In addition, the new House Rules will put into place by March 1, 2007, many more restrictions and requirements concerning the acceptance of travel expenses for "officially connected" travel by Members and staff from outside private sources, specifically to further restrict and limit the participation and involvement of lobbyists, foreign agents, or their clients in such travel events, and to provide for more transparency and disclosures of any such travel.