prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.

Report 1: The Railroad Retirement Board (RRB), an independent federal agency, administers retirement, survivor, disability, unemployment, and sickness insurance for railroad workers and their families under the Railroad Retirement Act (RRA) and the Railroad Unemployment Insurance Act (RUIA)  These acts cover workers who are employed by railroads engaged in interstate commerce and related subsidiaries, railroad associations, and railroad labor organizations  Lifelong railroad workers receive railroad retirement benefits instead of Social Security benefits; railroad workers with nonrailroad experience receive benefits either from railroad retirement or Social Security, depending on the length of their railroad service  The number of railroad workers has been declining since the 1950s, although the rate of decline has been irregular and recent years have seen increases in railroad employment after reaching an all-time low of 215,000 workers in January 2010  Recently, railroad employment peaked in April 2015 to 253,000 workers, the highest level since November 1999, and then declined through FY2017, falling to 221,000 workers  The total number of beneficiaries under the RRA and RUIA decreased from 623,000 in FY2008 to 574,000 in FY2017, and total benefit payments increased from $10 1 billion to $12 6 billion during the same time  During FY2017, the RRB paid nearly $12 5 billion in retirement, disability, and survivor benefits to approximately 548,000 beneficiaries  Almost $105 4 million in unemployment and sickness benefits were paid to approximately 28,000 claimants  This report explains the programs under RRA and RUIA, including how each program is financed, the eligibility rules, and the types of benefits available to railroad workers and family members  It also discusses how railroad retirement relates to the Social Security system  For a quick overview of this topic, see CRS In Focus IF10481, Railroad Retirement Board: Retirement, Survivor, Disability, Unemployment, and Sickness Benefits   The RRA authorizes retirement, survivor, and disability benefits for railroad workers and their families  In December 2017, there were a total of 526,100 RRA beneficiaries, decreasing from 672,400 in 2001  This decline might partly result from the decline in railroad employment in the past five decades  The average monthly benefit for each beneficiary was about $1,986 in 2017, which increased from $1,043 in 2001, reflecting the growth in average wages and prices (see Figure 1 )  The railroad retirement, disability, and survivor program is mainly financed by payroll taxes, financial interchanges from Social Security, and transfers from the National Railroad Retirement Investment Trust (NRRIT) (see Figure 2 ), all of which accounted for 93 9% of the $12 7 billion gross funding of the RRA program during FY2017  The remaining 6 1% of the program was financed by federal income taxes levied on railroad retirement benefits, interest on investment and other revenue, and general appropriations to pay the costs of phasing out vested dual benefits  Payroll taxes, which provided 47 0% of gross RRA funding in FY2017, are the largest funding source for railroad retirement, survivor, and disability benefits  Railroad retirement payroll taxes are divided into two tiers—Tier I and Tier II taxes  The Tier I tax is the same as the Social Security payroll tax: railroad employers and employees each pay 6 2% on earnings up to $132,900 in 2019  The Tier II tax is set each year based on the railroad retirement system's asset balances, benefit payments, and administrative costs  In 2019, the Tier II tax is 13 1% for employers and 4 9% for employees on earnings up to $98,700  Tier II taxes are used to finance Tier II benefits, the portion of Tier I benefits in excess of Social Security retirement benefits (such as unreduced early retirement benefits for railroad employees with at least 30 years of railroad service), and supplemental annuities  Tier I payroll taxes are deposited in the Social Security Equivalent Benefit Account (SSEBA), which pays the Social Security level of benefits and administrative expenses allocable to those benefits  The SSEBA also receives or pays the financial interchange transfers between the railroad retirement and Social Security systems  The financial interchange with Social Security provided 32 6% of gross RRA funding in FY2017  The purpose of the financial interchange is to place the Social Security trust funds in the same position they would have been in, if railroad employment had been covered under Social Security since that program's inception  Tier II tax revenues that are not needed to pay current benefits or associated administrative costs are held in the National Railroad Retirement Investment Trust (NRRIT), which is invested in both government securities and private equities  NRRIT transfers provide another revenue source for railroad benefits, and they were 14 3% of gross RRA funding in FY2017  Prior to the Railroad Retirement and Survivors' Improvement Act of 2001 ( P L  107-90 ), surplus railroad retirement assets could only be invested in U S  government securities—just as the Social Security trust funds must be invested in securities issued or guaranteed by the U S  government  The 2001 act established the NRRIT to manage and invest the assets in the Railroad Retirement Account in the same way that the assets of private-sector and most state and local government pension plans are invested  The remainder of the railroad retirement system's assets, such as assets in SSEBA, continues to be invested solely in U S  government-issued or -granted securities  The combined fair market value of Tier II taxes and NRRIT assets is designed to maintain four to six years' worth of RRB benefits and administrative expenses  To maintain this balance, the Railroad Retirement Tier II tax rates automatically adjust as needed  This tax adjustment does not require congressional action, according to Section 204 of the 2001 act  To be insured for railroad benefits, a worker must generally have at least 10 years of covered railroad work or 5 years performed after 1995 and "insured status" under Social Security rules (generally 40 earnings credits) based on combined railroad retirement and Social Security-covered earnings  An insured railroad worker's family may be entitled to receive railroad retirement benefits  If a worker does not qualify for railroad retirement benefits, his or her railroad work counts toward Social Security benefits  Of the total $12 5 billion benefit payments during FY2017, 60 0% (or $7 5 billion) were paid in retirement annuities to retired workers, 8 0% (or $1 0 billion) in disability annuities, 14 4% (or $1 8 billion) in spouse annuities, and 16 8% (or $2 1 billion) in survivor annuities  Tier I annuities are designed to be nearly equivalent to Social Security Old Age, Survivors, and Disability Insurance benefits  Tier I annuities are calculated using the Social Security benefit formula and are based on both railroad retirement and Social Security-covered employment  However, Tier I annuities are more generous than Social Security benefits in certain situation  For example, at the age of 60, railroad workers with at least 30 years of covered railroad work may receive unreduced retirement annuities  At the full retirement age (FRA), which is gradually increasing from 65 to 67 for Social Security and railroad retirement beneficiaries, insured workers with fewer than 30 years of service may receive full retirement ann uities  Alternatively, workers with fewer than 30 years of service may, starting at the age of 62, receive annuities that have been reduced actuarially for the additional years the worker is expected to spend in retirement  Tier I benefit reductions for early retirement are similar to those in the Social Security system  As the FRA rises, so will the reduction for early retirement  If a railroad employee delays retirement past FRA, Tier I annuities are increased by a certain percentage for each month up until the age of 70, which is identical to the benefit increase provided by Delayed Retirement Credits under the Social Security system  In general, Social Security benefits are subtracted from Tier I annuities, because work covered by Social Security is counted toward Tier I annuities  Beneficiaries insured by both systems receive a single check from the RRB  Railroad retirement annuities may also be reduced for certain pensions earned through federal, state, and local government work that is not covered by Social Security  For early retirees who continue to work for a nonrailroad employer while receiving the retirement benefit during the year prior to FRA, Tier I benefits are reduced by $1 for every $2 earned above an exempt amount ($17,040 in 2018)  After Tier I benefits are first paid, they increase annually with a cost-of-living adjustment (COLA) in the same manner as Social Security benefits  Retirement annuities are not payable to workers who continue to work in a covered railroad job or who return to railroad work after retirement  Tier II retirement annuities are paid in addition to Tier I annuities and any private pension and retirement saving plans offered by railroad employers  They are similar to private pensions and based solely on covered railroad service  Tier II annuities for current retirees are equal to seven-tenths of 1% of the employee's average monthly earnings in the 60 months of highest earnings, times the total number of years of railroad service  Tier II annuities are increased annually by 32 5% of the Social Security COLA  Tier II annuities are not (in contrast to Tier I annuities) reduced if a worker receives Social Security benefits or a government pension that was not covered by Social Security  For railroad retirees and spouses who work for their last pre-retirement nonrailroad employer while receiving retirement benefits, Tier II annuities are reduced by $1 for every $2 earned, capped at 50% of the Tier II annuity  There is no cap to the earnings-related reduction in railroad Tier I or Social Security benefits  In addition, the earnings-related reduction applies to all Tier II beneficiaries regardless of age, whereas for railroad Tier I and Social Security benefits, the earnings-related reduction applies only until the beneficiary reaches FRA  Tier II payroll taxes also finance a supplemental annuity program  Supplemental annuities are payable to employees first hired before October 1981, aged 60 with at least 30 years of covered railroad service or aged 65 and older with at least 25 years of covered railroad service, and a current connection with the railroad industry  In addition, general revenues finance a vested dual benefit for those who were insured for both railroad retirement and Social Security in 1974 when the two-tier railroad retirement benefit structure was established  Neither supplemental annuities nor vested dual benefits are adjusted for changes in the cost of living during retirement  Supplemental annuities are subject to the same earnings reductions as Tier II benefits; vested dual benefits are subject to the same earnings reductions as Tier I benefits  Railroad workers may be eligible for disability annuities if they become disabled regardless of whether the disability is caused by railroad work  The RRB determines whether a worker is disabled based on the medical evidence provided during the application process  Railroad workers found to be totally and permanently disabled from all work may be eligible for Tier I benefits at any age if the worker has at least 10 years of railroad service  Totally disabled workers may also receive Tier II benefits at the age of 62 if they have 10 or more years of service  Occupational disability annuities are also payable to workers found to be permanently disabled from their regular railroad occupations, if the worker is at least 60 years old with 10 years of service (or any age with 20 years of service), and with a current connection to the railroad industry  A five-month waiting period after the onset of disability is required before any disability annuity can be payable  Disability annuities are not payable if a worker is currently employed in a covered railroad job  Disability benefits are suspended if a beneficiary earns more than a certain amount after deducting certain disability-related work expenses  The Tier I portion of disability benefits may be reduced for the receipt of workers compensation or government disability benefits  In any month that a worker collects a railroad retirement or disability annuity, his or her spouse may also be eligible for a spousal annuity equal to or greater than the benefit he or she would have received if the worker's railroad work had been covered by Social Security  A spouse is eligible for a spousal annuity when he or she reaches the same minimum age required for the worker (i e , either at the age of 60 or 62, depending on years of the worker's service)  At any age, a spouse may be eligible for a spousal annuity if he or she cares for the worker's unmarried child under the age of 18 (or a child of any age that was disabled before the age of 22)  An individual must have been married to the railroad worker for at least one year before he or she applies for the spousal annuities, with certain exceptions  A qualifying spouse receives 50% of the worker's Tier I benefit before any reductions (or, if higher, a Social Security benefit based on his or her own earnings)  Spouses may also receive 45% of the worker's Tier II benefit before any reductions  Divorced spouses of retired or disabled railroad workers may also be eligible for spousal annuities  A divorced spouse may receive 50% of the worker's Tier I benefit before reductions, but no Tier II benefits  To qualify, the former spouse must have been married to the worker for at least 10 years and must not currently be married (remarriages if any must have terminated); both the worker and former spouse must be at least 62 years old  For spouses, as for railroad workers, Social Security benefits are subtracted from Tier I annuities  The Tier I portion of a spouse annuity may also be reduced for receipt of any pension from government employment not covered by Social Security based on the spouse's own earnings  Spouses are subject to reductions based on the primary worker's earnings as well as on their own earnings  For example, for early retirement, spouses are subject to different benefit reductions from workers  Finally, spouse annuities are reduced by the amount of any railroad benefits earned based on their own work  After the worker's death, surviving spouses, former spouses, children, and other dependents may be eligible to receive survivor annuities, which are paid in addition to any private life insurance offered by railroad employers  To be insured for survivor annuities, the worker must have had a current connection with the railroad industry at the time of death  Railroad survivor annuities are generally higher than comparable Social Security benefits because railroad workers' families may be entitled to Tier II annuities as well as Tier I annuities (as noted above, Tier I annuities are equivalent to Social Security benefits)  In cases where no monthly survivor annuities are paid, a lump-sum payment may be made to certain survivors  The widows and widowers of railroad workers may be eligible to receive survivor annuities  At FRA, a surviving spouse may be eligible for 100% of the worker's Tier I annuity (or his or her own Social Security or railroad retirement Tier I benefit, if higher)  The widow(er) may also receive up to 100% of the worker's Tier II annuity  As early as the age of 60 (or age 50, if disabled), widows and widowers may receive reduced survivor annuities  A qualifying widow(er) must have been married to the deceased railroad worker for at least nine months, with certain exceptions  At any age, a widow(er) caring for a deceased worker's child under the age of 18 may receive a survivor annuity equal to 75% of the worker's Tier I annuity, as well as up to 100% of the worker's Tier II annuity  Widow(er)s who are the natural or adoptive parent of the deceased worker's child do not have to meet the length of marriage requirement  Survivor annuities may also be payable to a surviving divorced spouse or remarried widow(er)  To qualify for benefits, a surviving divorced spouse has to be married to the employee for at least 10 years and is unmarried or remarried after age 60 (age 50 for disabled surviving divorced spouse)  A surviving divorced spouse who is unmarried can qualify for benefits at any age if caring for the employee's child who is under age 16 or disabled  Benefits are limited to the amounts Social Security would pay (Tier I only) and therefore are less than the amount of the survivor annuity otherwise payable  Railroad workers' children may also receive survivor annuities  To qualify, a child must be unmarried and under the age of 18 (or 19 if still in high school)  Disabled adult children may qualify if their disability began before the age of 22  Eligible children receive 75% of the worker's Tier I annuity and 15% of the worker's Tier II annuity  In addition, if a worker's parent was dependent on the worker for at least half of the parent's support, he or she may receive 82 5% of the worker's Tier I annuity and 35% of the worker's Tier II annuity after reaching age 60  Survivor annuities are not payable to a current railroad employee, and survivor annuities are reduced by any railroad retirement benefit the survivor has earned through his or her own railroad work  Survivors receive the same reductions as retired workers for Social Security benefit receipt; they also have reductions from government pension receipts that are not covered by Social Security  A family maximum applies to survivor benefits, usually applicable when three or more survivors receive benefits on a worker's record (not counting divorced spouses)  In summary, Table 1 provides data on railroad retirement, survivor, and disability annuities as of June 2018  Railroad workers may qualify for daily unemployment and sickness benefits under the Railroad Unemployment Insurance Act (RUIA)  These monetary benefits are paid in addition to any paid leave or private insurance an employee may have  For sickness benefits, a worker must be unable to work because of illness or injury  Sickness benefits are distinct from disability benefits because they are intended to cover a finite, temporary period of time  Workers may not earn any money while receiving unemployment or sickness benefits  Figure 3 displays the monthly number of beneficiaries with unemployment and sickness benefits from January 2002 to July 2018, respectively  Although the number of sickness beneficiaries stayed relatively stable over time, the number of unemployment insurance beneficiaries increased significantly during and after the most recent economic recession from 2007 to 2009  Railroad unemployment and sickness benefits are financed solely by railroad employers' payroll taxes, based on the taxable earnings of their employees  Employers' tax rates depend on the past rates of unemployment and employees' sickness claims  For calendar year 2018, the employer tax rate ranges from 2 2% to 12 0% on the first $1,560 of each employee's monthly earnings  The payroll tax proceeds not needed immediately for unemployment and sickness insurance benefits or operating expenses are deposited in the Railroad Unemployment Insurance Account maintained by the Treasury  This account, together with similar unemployment insurance accounts for each state, forms a Federal Unemployment Insurance Trust Fund whose deposits are invested in U S  government securities, and the Railroad Unemployment Insurance Account receives interest based on these deposits  During FY2017, payroll tax contributions from railroad employers totaled $126 4 million and interest income was about $4 million  The RUIA provides for employers to pay a surcharge if the Railroad Unemployment Insurance Account falls below an indexed threshold amount  The surcharge is added to the employer's tax rate  However, the total tax rate plus the surcharge cannot exceed the maximum rate of 12 0%, unless the surcharge is 3 5%, in which case the maximum tax rate is increased to 12 5%  From 2004 through 2010, the surcharge was 1 5%  The surcharge in 2011 was 2 5% and 1 5% in 2012 with no surcharges in 2013 or 2014  The surcharge in 2018 was 1 5%, the same as the level in the past three years  Eligibility for railroad unemployment and sickness benefits is based on recent railroad service and earnings  The annual benefit year begins on July 1  Eligibility is based on work in the prior year, or the base year  To qualify in the benefit year beginning July 1, 2018, railroad workers must have base year earnings of $3,862 50 in calendar year 2017, counting no more than $1,545 per month  New railroad workers must also have at least five months of covered railroad work in the base year  To receive unemployment benefits, a worker must be ready, willing, and able to work  The maximum daily unemployment and sickness benefit payable in the benefit year that began July 1, 2018, is $77, and the maximum benefit for a biweekly claim is $770  However, due to sequestration pursuant to the Budget Control Act of 2011 ( P L  112-25 , as amended), the maximum daily benefit of $77 is reduced by 6 2% to $72 23 and the maximum biweekly benefit is reduced by 6 2% to $722 26 through September 30, 2019  Railroad workers receive these benefits only to the extent that they are higher than other benefits they receive under the RRA, the Social Security Act, or certain other public programs, including workers compensation  Unemployment and sickness beneficiaries may receive normal benefits for up to 26 weeks in a benefit year or until the benefits they receive equal their creditable earnings in the base year if sooner  Employees with at least 10 years of covered railroad service may qualify for extended benefits for 13 weeks after they have exhausted normal benefits  Table 2 displays the number and average weekly amount of RUIA benefits paid in June 2018  Workers who apply for unemployment benefits are automatically enrolled in a free job placement service operated by railroad employers and the RRB  


Report 2:  Some mergers that did not qualify as inversions under the tax law also occurred  The most significant in size was the proposed Pfizer merger  On November 23, 2015, Pfizer announced a proposed merger with Allergan, an Irish company, and the move of its headquarters to Ireland  This merger, which would result in the largest pharmaceutical company in the world, is not covered under the anti-inversion rules because Pfizer will own 56% of the value of the new firm  Allergan itself is the product of a merger involving both stock and cash acquisition by Actavis in 2015, with former Allergen shareholders owning a minority of the new company  Thus, this merger as well was not an inversion under the tax law  Actavis, in turn, was a former U S  firm that inverted by merger with Warner Chillcott, an Irish firm, in 2013 (where the former shareholders of the U S  firm acquired 77% of the stock)  Pfizer terminated its merger with Allergen after the April 4, 2016, regulations (discussed below)  Other notable mergers not subject to anti-inversion rules were the acquisition of Salix, a pharmaceutical company, by Valeant (a Canadian company); the acquisition of Auxilium by Endo (after Auxilium backed out of an inversion with Canadian firm QLT); the merger of Cyberonics with Italy's Sorin (to be headquartered in the U K ); and the merger of Broadcom (a chipmaker) with Avago (a Singapore firm)  Information and analytics provider HIS announced a merger with Markit Ltd, a U K  firm, to be headquartered in the U K , but the ownership share of HIS would be less than 60% of the firm  Johnson Controls also merged with Tyco, one of the earlier inverted firms  The 2015 Treasury regulations appear to have more limited consequences for inversions than the 2014 regulations did  Three regulatory changes were made by the notice  First, in the case where the foreign parent is a tax resident of a third country, stock issued by that parent to the existing foreign firm will be disregarded for purposes of the ownership requirement  That change will prevent a U S  firm from merging with a partner and then choosing a tax friendly third country to headquarter in  The second provision would clarify the so called "anti-stuffing" rules, where the foreign firm's size is inflated by adding assets to that firm  The notice clarifies that this rule applies to any assets, not just passive assets  Third, the current business activity exception requires 25% of business activity to be in the foreign country where the new parent is created or organized, but does not require it to be a foreign parent  This rule requires the business activity to be in the foreign parent  It prevents inversion based on the business activity test when the foreign parent has a tax residence in another country without substantial business activities  On April 4, 2016, the Treasury Department issued temporary and proposed regulations formalizing rules contained in Notices 2014-52 and 2015-79 limiting corporate tax inversions, as well as adding new rules addressing inversions and earnings-stripping transactions  In response to these new regulations, the proposed merger between Pfizer and Allergen PLC has been terminated  The April 4, 2016, Treasury regulations put in place several anti-inversion rules that target groups that have engaged in a series of inversion or acquisition transactions as well as a rule that restricts postinversion asset dilution  The temporary regulations target inversion transactions involving a new foreign parent that previously acquired one or more U S  entities in inversions or acquisitions in which the new foreign parent issued stock  These prior acquisitions would generally increase the value of the foreign entity, enabling it to subsequently engage in an inversion transaction with a larger U S  company while remaining below the 60% or 80% ownership thresholds  The temporary regulations disregard stock of the new foreign parent to the extent the value of such stock is attributable to its prior U S  entity acquisitions during the prior three years  According to analysis by Americans for Tax Fairness, the implementation of this rule would have increased Pfizer's share of the merged company to roughly 70% from 56% prior to the rule  Similar to the multiple domestic entity acquisition rule, the multiple-step acquisition rule targets certain inversions that are structured as back-to-back foreign acquisitions  Specifically, it targets transactions that are part of a plan in which a foreign corporation acquires substantially all of the assets of a U S  entity and, subsequent to this first acquisition, a second foreign corporation acquires substantially all of the assets of the first foreign corporation  The temporary regulations, under certain circumstances, treat each acquisition as an acquisition of a U S  entity that may be subject to anti-inversion rules  Unlike the multiple domestic entity acquisition rule, which has a three-year look-back period, the multiple-step acquisition rule can be applied to all acquisitions that are part of the same plan regardless of time  A third rule modified existing regulations to restrict the ability of inverted companies to avoid paying tax on unrealized gains (under Section 965) through a transfer to a controlled foreign corporation (CFC) (under Section 351)  This would address situations where a CFC of an inverted U S  company engages in a postinversion exchange that could dilute a U S  shareholder's indirect interest in the exchanged asset, allowing the U S  shareholder to avoid U S  tax on any realized gain in the asset that is not recognized at the time of the transfer  The rule requires a CFC of an inverted U S  group to recognize all realized gain with respect to any such postinversion Section 351 exchange  The earnings-stripping regulations aim to restrict the ability of foreign-parent groups to shift earnings out of the United States through dividends or other economically similar transactions (under Section 385)  In these cases certain related-party debt will be characterized as equity for tax purposes  The result of equity classification is that interest deductions will be disallowed, and withholding obligations of 30% (or lower rate based on an applicable income tax treaty) could ensue  The regulations do not normally apply for related-party debt that is incurred to fund actual business investment, such as building or equipping a factory  The regulations also require documentation of debt instruments issued and held by certain members of an expanded group to establish that such instruments are properly characterized as debt  The regulations also allow the IRS on audit to treat an instrument issued to a related party as in part debt and in part equity  The final regulations issued on October 21, 2016, scaled back the original regulations in response to the comment period  The final regulations removed the general bifurcation rule that would have allowed a debt instrument to be classified as part debt and part equity and an exemption for debt for foreign issuers  The rules also provided exemptions for cash pools (a pool of cash to be accessed for short-term needs), short-term loans, regulated financial entities, and pass-throughs (firms not taxed as corporations)  The Treasury delayed documentation rules for a year on July 28, 2017  Treasury announced on July 7, 2017, that these debt-equity regulations were to be among eight rules targeted for review  The Treasury issued final regulations for the temporary regulations introduced in April 2016 on July 12, 2018, as TD 9834 with minor changes  Two days after the regulations were issued, Pfizer withdrew from its merger with Allergen, an Irish-based company that was an inverted firm  It appears that this merger was affected by the multiple-entity rule, which has come to be called "serial inversion " Mergers between Shire (Ireland based) and Basalta, and between HIS and Markit Group Inc  (U K  based) went forward  The CF Industries merger with OCI NV (based in the Netherlands) was also called off; Johnson Controls and Tyco went forward  A merger between Konecranes (a Finnish firm) and Terex was scaled down to an acquisition of a share of Terex with the U S  firm owning 25%, thus avoiding the effect of regulations  In May 2016 Cardtronics, Inc , an ATM operator, announced a plan to move to the U K  using the substantial business activities test  Also in May, an oil and gas industry service and technology firm announced a merger with Technip SA (France) to form a U K  company, with each firm holding about half the stock and thus avoiding any of the recent regulations and establishing a new headquarters in another country  In 2017, Praxaire (a U S  industrial gas company) announced a merger with Linde AG (a German gas and technology company), also with each owning half of the new company  As noted in the introduction, statistical data suggest a decline in inversions from 2015 to 2016, and again from 2016 to 2017, and these data are consistent with the limited news reports of major inversions  Pfizer's CEO has recently indicated that deals are on hold generally while tax reform is being considered  The 2017 legislation not only made fundamental changes to the overall treatment of corporate income at home and abroad, but also adopted several provisions specifically aimed at inverted corporations (those with 60% to 80% ownership)  Under the new law, existing untaxed earnings held abroad are taxed under a deemed repatriation rule, but at a lower rate (8% for earnings reinvested in noncash assets and 15 5% for earnings held as cash or cash equivalents)  A special recapture rule applies on deemed repatriations of newly inverted firms  This recapture rule applies if a firm first becomes an expatriated entity at any time during the 10-year period beginning on December 22, 2017  In this case, the tax will be increased from 8% and 15 5% to 35% tax for the entire deemed repatriation, with no foreign tax credit allowed for the increase in tax rate  The additional tax is due on the full amount of the deemed repatriation in the first tax year in which the taxpayer becomes an expatriated entity  BEAT excludes payments which reduce gross receipts with the result that payment for the cost of goods sold is not included under BEAT  An exception applies for firms that invert after November 9, 2017, where payments to a foreign parent or any foreign firm in the affiliated for cost of goods sold is included in BEAT  The constructive ownership rules for purposes of determining 10% U S  shareholders, whether a corporation is a CFC and whether parties satisfy certain relatedness tests, were expanded in the 2017 tax revision  Specifically, the new law treats stock owned by a foreign person as attributable to a U S  entity owned by the foreign person (so-called "downward attribution")  As a result, stock owned by a foreign person may generally be attributed to (1) a U S  corporation, 10% of the value of the stock of which is owned, directly or indirectly, by the foreign person; (2) a U S  partnership in which the foreign person is a partner; and (3) certain U S  trusts if the foreign person is a beneficiary or, in certain circumstances, a grantor or a substantial owner  The downward attribution rule was originally conceived to deal with inversions  In an inversion, without downward attribution, a subsidiary of the original U S  parent could lose CFC status if it sold enough stock to the new foreign parent so the U S  parent no longer had majority ownership  With downward attribution, the ownership of stock by the new foreign parent in the CFC is attributed to the U S  parent, so that the subsidiary continues its CFC status, making it subject to any tax rules that apply to CFCs (such as Subpart F and repatriation taxes under the old law, and Subpart F and GILTI under the new law)  Dividends (like capital gains) are allowed lower tax rates than the rates applied to ordinary income  The rates are 0%, 15%, and 20% depending on the rate bracket that ordinary income falls into  Certain dividends received from foreign firms (those that do not have tax treaties and PFICs ) are not eligible for these lower rates  Dividends paid by firms that inverted after the date of enactment of P L  115-97 are added to the list of those not eligible for the lower rates  In 2004, an excise tax of 15% was imposed on stock compensation received by insiders in an expatriated corporation; the new law increases it to 20%, effective on the date of enactment for corporations that first become expatriated after that date  As noted earlier, there are no aggregate data available yet for 2018, but there are also indications that most tax-motivated inversions had already been discouraged by the 2016 regulations  Considering announcements of individual companies, one planned inversion, by Assurant, Inc  was revised to retain the headquarters in the United States  Ohio-based Dana, Inc  announced plans to merge and move the headquarters to the U K , although the merger would leave the U S  shareholders with less than 60% ownership, and therefore not make them subject to anti-inversion penalties  A recent announcement indicated that the Dana merger was called off  Some firms may be considering reversing their headquarters decisions  The AJCA was successful at limiting a form of inversions, at least initially  In particular, the AJCA stopped the practice of basic "naked inversions," in which little activity or presence in the new jurisdiction is required and the new parent is domiciled in a tax haven  Further, through regulation, Treasury has limited the use of the substantial business activity test safe harbor to invert  Recent activity (as noted above), however, suggests that mergers continued to be used as a vehicle for corporate inversions after these changes  These more recent mergers have increasingly resulted in a U K  parent company (e g , FMC-Technip, HIS-Markit), due to policy decisions by the U K  government  Specifically, the U K  lowered its corporate tax rate and adopted a territorial tax system  In addition, anti-abuse provisions for foreign source income were weakened by the European Union courts  The U K  has also proposed taxing certain intangible income at a 10% rate  (This is referred to as a patent box ) To restrict the occurrence of tax-motivated inversions, both a general reform of the U S  corporate tax and specific provisions to deal with tax-motivated international mergers were discussed  Some important changes were made in 2017; other options remain  Interest in reforming the corporate income tax was long-standing, including calling for explicit accommodation of international concerns  As noted earlier, two aspects of the U S  corporate tax system are particularly relevant to corporate location decisions: the corporate tax rate and the taxation of foreign-source earnings  Taken together, these factors, under prior law, could yield a substantial reduction in taxes paid  In the case of the proposed merger of Forest Laboratories Inc  (a U S  company) and Actavis (an Irish company) in 2014, the tax reduction was estimated to be roughly $100 million per year  Prior to the 2017 changes, the U S  corporate statutory tax rate was higher than both the average statutory rates of the other Organisation for Economic Co-operation and Development (OECD) countries and that of the 15 largest economies in the world  Many asserted that the U S  statutory tax rate needed to be lowered to reduce the incentive for inversion transactions  With the rate lowered from 35% to 21%, the combined central and subnational corporate tax rates are similar to most rates in the OECD  While lowering the corporate tax rate would reduce the incentive to invert, there are reasons to suggest that it would be impractical to reduce the rate to the level needed to stop inversions  Namely, to stop inversions through a reduction in the corporate tax rate would require a U S  corporate tax rate set equal to the lowest tax rate of a destination company, or zero  A lower corporate tax rate alone reduced the incentive for corporate inversions, primarily by reducing the tax rate applied to repatriated earnings  For a company like Pfizer, with large foreign earnings, a rate reduction could yield significantly lower taxes paid  However, as discussed below, the benefit of a lowered rate is negligible relative to the benefit to corporate taxpayers afforded by territorial tax systems, when income earned in low- or no-tax foreign jurisdictions is never subject to U S  tax  Two factors present challenges for lowering the corporate tax rate further  First, if revenue neutrality is a goal, there may not be enough base-broadening provisions with revenue offsets to provide deep cuts in the corporate tax; and, if such offsets were found, they might have their own consequences for investment  Reducing the corporate tax without corresponding base broadening would likely reduce corporate tax revenue, adding to chronic budget deficits  Prior to the 2017 revision, the United States was one of the few countries that had a worldwide tax system and levied a tax on the foreign-source income of domestic corporations  Changing corporate tax residence to a country with a territorial tax system (where foreign earnings would not be taxed at all) was thought to drive inversion decisions  This issue led to proposals for the United States to adopt a territorial tax system to stop inversion transactions  One concern about adopting a territorial tax system is the strain it would likely place on the current transfer pricing system  From this perspective, the worldwide tax system provided a backstop on the amount of profit shifting or base erosion possible, because shifted profits will eventually be repatriated  Under a territorial tax system, this is not the case  Research has found evidence of significant profit shifting, especially related to mobile intellectual property, suggesting a lot of income from foreign sources is really U S  income in disguise  Numerous other issues surround the adoption of a U S  territorial tax  For example, while some supported a territorial tax to eliminate the incentive to keep earnings abroad, others opposed it because it likely discourages domestic investment and activity in the United States  The revisions in 2017 maintained a worldwide system, but with some changes  Income from U S  subsidiaries is taxed on a current basis but at a lower rate and with an exemption for a deemed return on tangible assets  It also provided a subsidy for locating intangible assets with earnings from abroad in the United States  Many of the inverting firms had significant intangible assets, and it is not clear whether this new regime (a lower tax rate but on a current basis) is more or less generous to firms considering inverting  Moving closer to a pure territorial tax, as in the case of a rate reduction, would likely reduce corporate tax revenue and add to current budget pressures unless it is offset by other tax increases, although this effect would be less costly at the lower 21% tax rate  In 2027, GILTI is projected to raise $21 billion  GILTI could be retained and the rate lowered or the temporarily lower rate could be made permanent  There has been some agreement that adopting a territorial tax without some significant anti-abuse provisions could be problematic, as it would likely increase profit shifting abroad by U S  firms  Evidence suggests that administrative remedies were successful at dramatically slowing inversions; the targeted legislative changes in the 2017 Act may have had some impact as well  There are further changes that could be made to discourage inversions  This section discusses the history of these proposals, both legislative and administrative  One approach would be to extend the rate recapture enacted in the 2017 Act for a period longer than 10 years, or to make it apply indefinitely to future inversions  A second alternative is to directly restrict the ability of U S  firms to invert by merger  The President's FY2015, FY2016, and FY2017 budget proposals contained a provision that would have further restricted the use of inversions  The proposal would modify the 80% test enacted in the AJCA to a 50% test and eliminate the 60% test  In effect, this proposal would reduce the percentage of shareholders that are owners of the "old U S  company" and the "new foreign merged company " The proposal would also require that the new foreign corporation be managed and controlled from outside the United States and prohibit transactions where the new foreign company has substantial business activities in the United States  In November 2015, then-Senate Finance Committee Chairman Hatch indicated the possibility of adding an anti-inversion provision to legislation to extend expired provisions  Many of these bills were introduced in the 115 th Congress  H R  1931 (Doggett), the Corporate EXIT Fairness Act, and H R  3434 (Levin) and S  1636 (Durbin, along with a number of cosponsors), the Stop Corporate Inversions Act, would have treated all mergers as U S  firms when the U S  firm's shareholders hold more than 50% or when management and control primarily takes place in the United States  H R  1932 (Doggett) and S  851 (Whitehouse), as with bills introduced in the 114 th Congress, would have included anti-inversion provisions as part of a broader proposal to address tax havens and deferral  H R  3603 (Levin) would have addressed earnings stripping of inverted corporations  H R  3424 (DeLauro) would disallow federal contracts for inverted firms  H R  1451 (Schakowsky) and S  586 (Sanders) would make major changes in the tax treatment of foreign source income and include anti-inversion rules  Following the change in the international system adopted at the end of 2017, Representative Doggett and Senator Whitehouse introduced the "No Tax Break for Outsourcing Act" ( H R  5108 , S  2459 ) which, in addition to other changes, would have treated foreign corporations that are managed and controlled in the United States as domestic corporations and treated inverted firms as U S  firms when the shareholders of the former U S  company own more than 50% of the shares  These bills would have also limited interest deductions in the United States to the proportionate share of the firm's assets  The last proposal (to allocate worldwide interest) was in both the House and Senate versions of the legislation ( H R  1 ; 115 th Congress) in somewhat different form but was not retained in the final legislation  While this proposal was not specifically targeted at inverted firms it would have increased the restrictions that limit earnings stripping  Former President Obama had encouraged Congress to act directly to limit inversions, but had also indicated on August 6, 2014, that administrative changes to limit inversions were under examination  Prior to that announcement, Steve Shay, a Harvard professor and former practitioner and Treasury official, outlined two regulatory actions that he believed could be taken  The first would limit earnings stripping by reclassifying debt as equity due to excessive related party debt in an inversion  (The second provision is no longer relevant under the new international tax regime ) A number of other administrative proposals that have been suggested (such as provisions relating to taxing accumulated deferred earnings) are no longer relevant and others have been adopted in the regulatory changes discussed above  Expanding the scope of Section 7874 (which treats inverted firms as U S  firms) by combining multiple transactions into single ones, or vice versa  The scope of Section 7874 could also be expanded by treating certain stock as disqualified (because it is expected to be held temporarily or because it is accompanied by restrictions on voting rights); this provision was adopted in Treasury regulations; Potentially recognizing accumulated deferred earnings as currently taxable under authority such as Subpart F, Section 367, or other rules (this provision is no longer relevant with the end of deferral, but it may have influenced the decision to tax deferred earnings of newly inverted firms at the full 35% rate for the next 10 years); Issuing regulations that would generally tighten restrictions on interest deductions under the thin capitalization rules of Section 163(j)  These changes would probably apply to corporations in general, and not just to inverted corporations (this change was made in the 2017 tax revision); Stricter regulations under Section 367 to immediately include foreign earnings in the case of actions that attempt to move foreign operations out from under the U S  parent  This would make future earnings of these operations nontaxable; Strengthening and modernizing the effectively connected income rules that determined whether trade or business activity is taking place in the United States by foreign firms; and Closely monitoring the creation of non-U S  subsidiaries owned by the foreign parent after inversion, and ensuring that assets (including intangibles such as inventions, knowhow, etc ) transferred from the U S  firm are transferred at arms-length prices  There is disagreement among experts about whether the types of regulatory changes discussed in this section are feasible or desirable  A number of legislative proposals were advanced in 2014, when the wave of inversions through merger began  Representative Levin, the ranking member of the House Ways and Means Committee, introduced the Stop Corporate Inversions Act of 2014 ( H R  4679 ), which would have reflected the Administration's proposed changes, retroactive to May 8, 2014  The inversion would have not been recognized if the U S  stockholders had 50% of the shares or if 25% of the business activity is in the United States  A companion bill, which would have sunset in two years to provide time for tax reform, was introduced in the Senate by Senator Levin in 2014 ( S  2360 )  The Joint Committee on Taxation estimated the permanent proposal to gain $19 5 billion in revenue over FY2015-FY2024  The two-year proposal would have raise $0 8 billion over the same period  In the 114 th Congress, these legislative proposals were introduced as H R  415 (Levin) and S  198 (Durbin)  Senator Casey proposed an anti-inversion amendment to an education bill ( S  1177 )  In the 114 th Congress, H R  297 (Doggett) and S  174 (Whitehouse) included anti-inversion provisions as part of a broader proposal to address tax haven abuses and restrict the benefits of deferral  S  922 (Sanders) and H R  1790 (Schakowsky) also included anti-inversion provisions, as well as earnings-stripping provisions (discussed below) and broader provisions, including the repeal of deferral  In 2014 a number of legislative proposals were introduced that would limit the tax benefits associated with inversions for certain corporations  For example, H R  1554 (Doggett), H R  3666 (DeLauro), H R  3793 (Maffei), S  268 (Levin), S  1533 (Levin), and S  1844 (Shaheen) would each treat corporations managed and controlled from the United States as domestic corporations regardless of their legal tax home or status as an inverted company  This provision was also included in S  922 (Sanders) and H R  1790 (Schakowsky)  Other proposals in 2014, H R  694 (Schakowsky) and S  250 (Sanders), would have eliminated deferral (taxing foreign source income currently), in addition to limiting the benefits of inversions when management and control continues to reside in the United States  Legislative proposals were also under discussion in 2014 by Representative Levin (announced July 31, 2014) and by Senator Schumer (announced August 14, 2014) to address earnings stripping, where foreign parent companies borrow from the U S  subsidiary to increase interest deductions and reduce taxable income in the United States  Both of these proposals would have tightened the rules allowing interest deductions by reducing the current limit on interest deductions relative to adjusted income from 50% to 25% and repealing an alternative safe-harbor debt-to-equity test  Both proposals would have also eliminated or limited interest carryforwards  The Schumer proposal was intended to apparently apply to inverted firms while the Levin proposal would have applied generally  The Levin proposal would have also limited other transactions between related parties within the firm that allow untaxed investment of funds in the United States  The restrictions on interest in the Levin bill were the same as those initially proposed in the House in 2004  Senator Schumer introduced his proposal, S  2786 , the Corporate Inverters Earnings Stripping Reform Act of 2014  Its limits on interest deductions would have applied to inverted firms where U S  shareholders own more than 50% of the firm  The restriction also would have applied to firms that inverted using the substantial business activities test  The bill had nine Democratic cosponsors; five of them were on the Senate Finance Committee  In the 114 th Congress, S  922 (Sanders) and H R  1790 (Schakowsky) included general earnings-stripping provisions for firms with a foreign parent  Earnings stripping provisions were also addressed in the report of the Senate Finance Committee's working group on Tax Reform  H R  5278 (DeLauro) and S  2704 (Levin), introduced May 30, 2014, would have disallowed awarding federal contracts to inverted firms  These proposals were introduced in the 114 th Congress as H R  1809 (DeLauro) and S  975 (Durbin)  In 2014, Senators Brown and Durbin proposed S  2895 , and Representative Doggett introduced H R  5549 , the Pay What You Owe Before You Go Act, that would have taxed the accumulated deferred earnings of inverting firms  Then Senate Finance Committee Chairman Ron Wyden had proposed having draft legislation in place in September 2014, and also referred to Schumer's earnings-stripping proposal  Senator Wyden had previously announced that any changes would be retroactive to May 8, 2014 

ground_truth: The Railroad Retirement Board (RRB), an independent federal agency, administers retirement, survivor, disability, unemployment, and sickness insurance for railroad workers and their families. During FY2017, the RRB paid nearly $12.5 billion in retirement, disability, and survivor benefits to approximately 548,000 beneficiaries and paid $105.4 million in unemployment and sickness benefits to approximately 28,000 claimants. Of the total $12.5 billion benefit payments in the same fiscal year, 60.0% was paid to retired workers, 8.0% to disabled workers, 14.4% to spouses, and 16.8% to survivors. The Railroad Retirement Act (RRA) authorizes retirement, disability, and survivor benefits for railroad workers and their families. RRA is financed primarily by payroll taxes, financial interchanges from Social Security, and transfers from the National Railroad Retirement Investment Trust (NRRIT). Railroad retirement payroll taxes have two tiers: the Tier I tax is essentially the same as the Social Security payroll tax and the Tier II tax is set each year based on the railroad retirement system's asset balances, benefit payments, and administrative costs. In FY2017, the gross RRA funding was about $12.7 billion. Railroad retirement annuities are also divided into two tiers. Tier I annuities are designed to be nearly equivalent to Social Security benefits and are based on both railroad retirement and Social Security-covered employment. However, Tier I annuities are more generous than Social Security benefits in certain situations. For example, at the age of 60, railroad workers with at least 30 years of covered railroad work may receive unreduced retirement annuities. Tier II annuities are similar to private pensions and based solely on covered railroad service. Tier II annuities are paid in addition to Tier I annuities. Railroad disability annuities may be payable to totally disabled railroad workers who are permanently disabled from all work and occupational disabled workers who are found to be permanently disabled from their regular railroad occupations. Eligible spouses and survivors of railroad workers may receive a certain portion of Tier I and Tier II benefits, but divorced spouses and surviving divorced spouses are eligible for only a certain portion of Tier I benefits. The Railroad Unemployment Insurance Act (RUIA) authorizes unemployment and sickness benefits for railroad workers. RUIA is financed solely by railroad employers, whose contributions are based on the taxable earnings of their employees. Eligibility for railroad unemployment and sickness benefits is based on recent railroad service and earnings. The maximum daily unemployment and sickness benefit payable in the benefit year that began July 1, 2018, is $77, and the maximum benefit for a biweekly claim is $770. Normal benefits are paid for up to 26 weeks in a benefit year. The railroad unemployment and sickness system remains affected by sequestration, as unemployment benefits will continue to be reduced through at least September 30, 2019.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.



Report 2: The Energy and Water Development appropriations bill includes funding for civil works projects of the U S  Army Corps of Engineers (USACE), the Department of the Interior's Central Utah Project (CUP) and Bureau of Reclamation (Reclamation), the Department of Energy (DOE), and a number of independent agencies, including the Nuclear Regulatory Commission (NRC) and the Appalachian Regional Commission (ARC)  Figure 1 compares the major components of the Energy and Water Development bill from FY2017 through the FY2020 request  President Trump submitted his FY2020 detailed budget proposal to Congress on March 18, 2019 (after submitting a general budget overview on March 11)  The budget requests for agencies included in the Energy and Water Development appropriations bill total $38 02 billion—$6 64 billion (15%) below the FY2019 appropriation  (See Table 3  ) A $1 309 billion increase (12%) is proposed for DOE nuclear weapons activities  For FY2019, the conference agreement on H R  5895 ( H Rept  115-929 ) provided total Energy and Water Development appropriations of $44 66 billion—3% above the FY2018 level and 23% above the FY2019 request  The bill was signed by the President on September 21, 2018 ( P L  115-244 )  Figures for FY2019 exclude emergency supplemental appropriations totaling $17 419 billion provided to USACE and DOE for natural disaster response by the Bipartisan Budget Act of 2018 ( P L  115-123 ), signed February 9, 2018  For more details, see CRS Report R45258, Energy and Water Development: FY2019 Appropriations , by Mark Holt and Corrie E  Clark, and CRS Report R45326, Army Corps of Engineers Annual and Supplemental Appropriations: Issues for Congress , by Nicole T  Carter  The FY2020 budget request proposes substantial reductions from the FY2019 enacted level for DOE energy research and development (R&D) programs, including a reduction of $178 million (-24%) in fossil fuels and $502 million (-38%) in nuclear energy  Energy efficiency and renewable energy R&D would decline by $1 724 billion (-83%)  DOE science programs would be reduced by $1 039 billion (-16%)  Programs targeted by the budget for elimination or phaseout include energy efficiency grants, the Advanced Research Projects Agency—Energy (ARPA-E), and loan guarantee programs  Funding would be reduced for USACE by $2 172 billion (-31%), and Reclamation and CUP by $462 million (-29%)  Congress did not enact similar reductions included in the FY2018 and FY2019 budget requests  Congressional consideration of the annual Energy and Water Development appropriations bill is affected by certain procedural and statutory budget enforcement measures  These consist primarily of limits associated with the budget resolution on total discretionary spending and allocations of this amount that apply to spending under the jurisdiction of each appropriations subcommittee  Statutory budget enforcement is derived from the Budget Control Act of 2011 (BCA; P L  112-25 )  The BCA established separate limits on defense and nondefense discretionary spending  These limits are in effect for each of the fiscal years from FY2012 through FY2021, and are primarily enforced by an automatic spending reduction process called sequestration, in which a breach of a spending limit would trigger across-the-board cuts within that spending category  The BCA's statutory discretionary spending limits were increased for FY2018 and FY2019 by the Bipartisan Budget Act of 2018 (BBA 2018; P L  115-123 ), enacted February 9, 2018  However, the BCA discretionary spending limits have not been increased for FY2020  As a result, the limits currently in place for FY2020 are substantially lower than the limits that were in place for FY2019  For discretionary defense spending, the FY2020 limit drops from $647 billion to $576 billion (-11%), while the nondefense limit drops from $597 billion to $542 billion (-9%)  A bill to raise the defense and nondefense spending limits for FY2020 and FY2021 was reported by the House Budget Committee April 5, 2019 ( H R  2021 , H Rept  116-35 )  (For more information, see CRS Report R44874, The Budget Control Act: Frequently Asked Questions , by Grant A  Driessen and Megan S  Lynch ) Several issues raised by the Administration's budget request could generate controversy during congressional consideration of Energy and Water Development appropriations for FY2020  The issues described in this section—listed approximately in the order the affected agencies appear in the Energy and Water Development bill—were selected based on the total funding involved, the percentage of proposed increases or decreases, and potential impact on broader public policy considerations  For USACE, the Trump Administration requested $4 827 billion for FY2020, which is $2 172 billion (-31%) below the FY2019 appropriation  The request includes no funding for initiating new studies and construction projects (referred to as new starts)  The FY2020 request seeks to limit funding for ongoing navigation and flood risk-reduction construction projects to those whose benefits are at least 2 5 times their costs, or projects that address safety concerns  Many congressionally authorized USACE projects would not meet that standard  The Administration also proposes to transfer the Formerly Utilized Sites Remedial Action Program from USACE to DOE  For Reclamation, FY2020 funding would be reduced by $461 6 million (29%) from the FY2019 level, to $1 11 billion  For more details, see CRS In Focus IF11137, Army Corps of Engineers: FY2020 Appropriations , by Nicole T  Carter and Anna E  Normand; CRS In Focus IF11158, Bureau of Reclamation: FY2020 Appropriations , by Charles V  Stern; and CRS Report R45326, Army Corps of Engineers Annual and Supplemental Appropriations: Issues for Congress , by Nicole T  Carter  DOE's FY2020 budget request includes three mandatory proposals related to the Power Marketing Administrations (PMAs)—Bonneville Power Administration (BPA), Southeastern Power Administration (SEPA), Southwestern Power Administration (SWPA), and Western Area Power Administration (WAPA)  PMAs sell the power generated by the dams operated by Reclamation and USACE  The Administration proposes to divest the assets of the three PMAs that own transmission infrastructure: BPA, SWPA, and WAPA  These assets consist of thousands of miles of high voltage transmission lines and hundreds of power substations  The budget request projects that mandatory savings from the sale of these assets would total approximately $5 8 billion over a 10-year period  The FY2020 budget request includes a proposal to repeal the borrowing authority for WAPA's Transmission Infrastructure Program, which facilitates the delivery of renewable energy resources  The FY2020 budget also proposes eliminating the statutory requirement that PMAs limit rates to amounts necessary to recover only construction, operations, and maintenance costs; the budget proposes that the PMAs instead transition to a market-based approach to setting rates  The Administration has estimated that this proposal would yield $1 9 billion in new revenues over 10 years  The budget also calls for repealing $3 25 billion in borrowing authority provided to WAPA for transmission projects enacted under the American Recovery and Reinvestment Act of 2009 ( P L  111-5 )  The proposal is estimated to save $640 million over 10 years  All of these proposals would need to be enacted in authorizing legislation, and no congressional action has been taken on them to date  The proposals have been opposed by groups such as the American Public Power Association and the National Rural Electrical Cooperative Association, and they have been the subject of opposition letters to the Administration from several regionally based bipartisan groups of Members of Congress  PMA reforms have been supported by some policy research institutes, such as the Heritage Foundation  For further information, see CRS Report R45548, The Power Marketing Administrations: Background and Current Issues , by Richard J  Campbell  The FY2020 budget request proposes to terminate both the DOE Weatherization Assistance Program and the State Energy Program (SEP)  The Weatherization Assistance Program provides formula grants to states to fund energy efficiency improvements for low-income housing units to reduce their energy costs and save energy  The SEP provides grants and technical assistance to states for planning and implementation of their energy programs  Both the weatherization and SEP programs are under DOE's Office of Energy Efficiency and Renewable Energy (EERE)  The weatherization program received $257 million and SEP $55 million for FY2019, after also having been proposed for elimination in that year's budget request, as well as in FY2018  According to DOE, the proposed elimination of the grant programs is "due to a departmental shift in focus away from deployment activities and towards early-stage R&D " Appropriations for DOE R&D on energy efficiency, renewable energy, nuclear energy, and fossil energy would be reduced from $4 133 billion in FY2019 to $1 729 billion (-58%) under the Administration's FY2020 budget request  Major proposed reductions include bioenergy technologies (-82%), vehicle technologies (-79%), natural gas technologies (-79%), advanced manufacturing (-75%), building technologies (-75%), wind energy (-74%), solar energy (-73%), geothermal technologies (-67%), and nuclear fuel cycle R&D (-66%)  DOE says the proposed reductions would primarily affect the later stages of energy research, which tend to be the most costly  "The Budget focuses DOE resources toward early-stage R&D, where the Federal role is strongest, and reflects an increased reliance on the private sector to fund later-stage research, development, and commercialization of energy technologies," according to the FY2020 DOE request  Similar reductions proposed by the Administration for FY2019 were not enacted  The Administration's FY2020 budget request, for the first time since FY2010, would provide new funding for a proposed nuclear waste repository at Yucca Mountain, NV; similar Administration requests for the repository project were not included in the enacted funding measures for FY2018 and FY2019  Under the FY2020 request, DOE would receive $116 million to seek an NRC license for the repository and to develop interim nuclear waste storage capacity  NRC would receive $38 5 million to consider DOE's application  DOE's total of $116 million in nuclear waste funding would come from two appropriations accounts: $90 million from Nuclear Waste Disposal and $26 million from Defense Nuclear Waste Disposal (to pay for defense-related nuclear waste that would be disposed of at Yucca Mountain)  DOE submitted a license application for the Yucca Mountain repository in 2008, but NRC suspended consideration in 2011 for lack of funding  The Obama Administration had declared the Yucca Mountain site "unworkable" because of opposition from the state of Nevada  The House voted to provide the Yucca Mountain funding requested for FY2018 and a $100 million increase for FY2019, but the Senate Appropriations Committee did not include it for FY2018, and it was not included in the Senate-passed bill for FY2019  Also as in FY2018, the FY2019 Senate bill included an authorization for a pilot program to develop an interim nuclear waste storage facility at a voluntary site (§304)  The enacted FY2019 appropriations measure did not include the House-passed funding for Yucca Mountain or the Senate's nuclear waste pilot program provisions  For more background, see CRS Report RL33461, Civilian Nuclear Waste Disposal , by Mark Holt  The FY2020 budget request would halt further loans and loan guarantees under DOE's Advanced Technology Vehicles Manufacturing Loan Program and the Title 17 Innovative Technology Loan Guarantee Program  Similar proposals to eliminate the programs in FY2018 and FY2019 were not enacted  The FY2020 budget request would also halt further loan guarantees under DOE's Tribal Energy Loan Guarantee Program  Under the FY2020 budget proposal, DOE would continue to administer its existing portfolio of loans and loan guarantees  Unused prior-year authority, or ceiling levels, for loan guarantee commitments would be rescinded, as well as $169 5 million in unspent appropriations to cover loan guarantee "subsidy costs" (which are primarily intended to cover potential losses)  On March 22, 2019, after the FY2020 budget request had been submitted, DOE provided $3 7 billion in additional Title 17 loan guarantees for two new reactors under construction at the Vogtle nuclear plant in Georgia  The Vogtle project had previously received $8 3 billion in loan guarantees under the DOE program  The Administration's request for DOE includes $107 million in FY2020 for the U S  contribution to the International Thermonuclear Experimental Reactor (ITER), which is under construction in France by a multinational consortium  "ITER will be the first fusion device to maintain fusion for long periods of time" and is to lay the technical foundation "for the commercial production of fusion-based electricity," according to the consortium's website  The FY2020 DOE appropriation request, 19% below the FY2020 level, would pay for components supplied by U S  companies for the project, such as central solenoid superconducting magnet modules  ITER has long attracted congressional concern about management, schedule, and cost  The United States is to pay 9% of the project's construction costs, including contributions of components, cash, and personnel  Other collaborators in the project include the European Union, Russia, Japan, India, South Korea, and China  The total U S  share of the cost was estimated in 2015 at between $4 0 billion and $6 5 billion, up from $1 45 billion to $2 2 billion in 2008  DOE funding for the project was $122 million in FY2018 and $132 million in FY2019  The Trump Administration's FY2020 budget would eliminate the Advanced Research Projects Agency—Energy (ARPA-E) and rescind $287 million of the agency's unobligated balances  ARPA-E funds research on technologies that are determined to have potential to transform energy production, storage, and use  "This elimination facilitates opportunities to integrate the positive aspects of ARPA-E into DOE's applied energy research programs," according to the DOE request  The Administration also proposed to terminate ARPA-E in its FY2018 and FY2019 budget requests, but Congress increased the program's funding in both years  Because ARPA-E provides advance funding for projects for up to three years, oversight and management of the program would still be required during a phaseout period  According to the Administration budget request, "ARPA-E will utilize the remainder of its unobligated balances to execute the multi-year termination of the program, with all operations ceasing by FY 2022 " The FY2020 budget request for DOE Weapons Activities is 12% greater than the FY2019 enacted level ($12 4 billion vs  $11 1 billion)  Weapons Activities programs are carried out by the National Nuclear Security Administration (NNSA), a semiautonomous agency within DOE  Under Weapons Activities, FY2020 funding for nuclear warhead life-extension programs (LEPs) would increase by 10% ($2 1 billion vs $1 9 billion)  The two most notable increases within that account are the funding request for W80-4 LEP, which increases by 37% ($898 6 million vs  $654 8 million) and the initiation of funding for the W87-1 LEP  The increase in the request for the W80-4 warhead, which is due to be carried on the new long-range standoff weapon (a new cruise missile), apparently is the result of a new budget estimate, as the Department of Defense is not accelerating development of the missile  The FY2020 request seeks $112 million for the W87-1 warhead (formerly the Interoperable Warhead 1, or IW-I), which received $53 million in FY2019  This warhead is to be carried by the Ground Based Strategic Deterrent, a new land-based missile that is scheduled to enter the force in the 2030s  The FY2020 budget request seeks $10 million for the W76-2 LEP, down from $65 million in FY2019  Work on this warhead is nearly complete  It is a low-yield modification of the current W76 warhead carried by U S  submarine-launched ballistic missiles  It remains controversial in Congress despite its relatively low price tag  In FY2020, NNSA is seeking $51 5 million, in the Stockpile Systems account, for surveillance efforts for the B83 gravity bomb, the most powerful bomb in the U S  inventory  This effort represents a 47% increase over the $35 million request in FY2019  The Obama Administration had planned to retire this bomb, but the Trump Administration reversed that decision in its 2018 Nuclear Posture Review  This decision may also prove controversial, as several Senators have been vocal supporters of the plan to retire the bomb  Within the Strategic Materials account in the NNSA budget, funding for Plutonium Sustainment would increase 97%, from $361 million enacted for FY2019 to $712 million requested for FY2020  This increase would support the Administration's plans to produce plutonium pits (or cores) for nuclear warheads at two facilities—Los Alamos National Laboratory in New Mexico and the Savannah River Site in South Carolina  The Administration is seeking $410 million to begin conceptual design and pre-Critical Decision (CD)-1 activities at Savannah River  For more information, see CRS Report R44442, Energy and Water Development Appropriations: Nuclear Weapons Activities , by Amy F  Woolf  DOE's Office of Environmental Management (EM) is responsible for environmental cleanup and waste management at the department's nuclear facilities  The total FY2020 appropriations request for EM activities of $6 469 billion would be a decrease of $706 million (-10%) from FY2019  The budgetary components of the EM program are Defense Environmental Cleanup (-9%), Non-Defense Environmental Cleanup (-20%), and the Uranium Enrichment Decontamination and Decommissioning Fund (-15%)  The FY2020 request includes a proposal to transfer management of the Formerly Utilized Sites Remedial Action Program (FUSRAP) from USACE to the Office of Legacy Management (LM), the DOE office responsible for long-term stewardship of remediated sites  The FY2020 LM budget request includes $141 million for FUSRAP, down from $150 million appropriated to USACE for the program in FY2019  According to the DOE budget justification, "USACE will continue to conduct cleanup of FUSRAP sites on a reimbursable basis " Table 1 indicates the steps during consideration of FY2020 Energy and Water Development appropriations  (For more details, see the CRS Appropriations Status Table at http://www crs gov/AppropriationsStatusTable/Index  ) As of the publication date of this report, no markups had been held  Table 2 includes budget totals for energy and water development appropriations enacted for FY2011 through FY2019, plus the FY2020 request  The annual Energy and Water Development appropriations bill includes four titles: Title I—Corps of Engineers—Civil; Title II—Department of the Interior (Central Utah Project and Bureau of Reclamation); Title III—Department of Energy; and Title IV—Independent Agencies, as shown in Table 3   Major programs in the bill are described in this section in the approximate order they appear in the bill  Previous appropriations and budget recommendations for FY2020 are shown in the accompanying tables, and additional details about many of these programs are provided in separate CRS reports as indicated  For a discussion of current funding issues related to these programs, see " Funding Issues and Initiatives ," above  Congressional clients may obtain more detailed information by contacting CRS analysts listed in CRS Report R42638, Appropriations: CRS Experts , by James M  Specht and Justin Murray  FY2020 budget justifications for the largest agencies funded by the annual Energy and Water Development appropriations bill can be found through the following links: Title I, U S  Army Corps of Engineers, Civil Works, http://www usace army mil/Missions/CivilWorks/Budget Title II Bureau of Reclamation, https://www usbr gov/budget/ Central Utah Project, https://www doi gov/sites/doi gov/files/uploads/fy2020_cupca_budget_justification pdf Title III, Department of Energy, https://www energy gov/cfo/downloads/fy-2020-budget-justification Title IV, Independent Agencies Appalachian Regional Commission, http://www arc gov/images/newsroom/publications/fy2020budget/FY2020PerformanceBudgetMar2019 pdf Nuclear Regulatory Commission, https://www nrc gov/docs/ML1906/ML19065A279 pdf Defense Nuclear Facilities Safety Board, https://www dnfsb gov/about/congressional-budget-requests Nuclear Waste Technical Review Board, http://www nwtrb gov/about-us/plans USACE is an agency in the Department of Defense with both military and civilian responsibilities  Under its civil works program, which is funded by the Energy and Water appropriations bill, USACE plans, builds, operates, and in some cases maintains water resources facilities for coastal and inland navigation, riverine and coastal flood risk reduction, and aquatic ecosystem restoration  In recent decades, Congress has generally authorized Corps studies, construction projects, and other activities in omnibus water authorization bills, typically titled Water Resources Development Acts (WRDA), prior to funding them through appropriations legislation  Recent Congresses enacted the following omnibus water resources authorization acts: in June 2014, the Water Resources Reform and Development Act of 2014 (WRRDA, P L  113-121 ); in December 2016, the Water Resources Development Act of 2016 (Title I of P L  114-322 , the Water Infrastructure Improvements for the Nation Act [WIIN]); and in October 2018, the Water Resources Development Act of 2018 (Title I of P L  115-270 , America's Water Infrastructure Act of 2018 [AWIA 2018])  These acts consisted largely of authorizations for new USACE projects, and they altered numerous USACE policies and procedures  Unlike in highways and municipal water infrastructure programs, federal funds for USACE are not distributed to states or projects based on formulas or delivered via competitive grants  Instead, USACE generally is directly involved in planning, designing, and managing the construction of projects that are cost-shared with nonfederal project sponsors  Prior to FY2010, in addition to site-specific project funding included in the President's annual budget request for USACE, Congress, during the discretionary appropriations process, had identified many additional USACE projects to receive funding or had adjusted the funding levels for the projects identified in the President's request  Starting in the 112 th Congress, site-specific project line items added or increased by Congress (i e , earmarks) became subject to House and Senate earmark moratorium policies  As a result, Congress generally has not added funding at the project level since FY2010  In lieu of the project-based increases, Congress has included "additional funding" for select categories of USACE projects and provided direction and limitations on the use of these funds  For more information, CRS In Focus IF11137, Army Corps of Engineers: FY2020 Appropriations , by Nicole T  Carter and Anna E  Normand  Previous appropriations and the President's request for FY2020 are shown in Table 4   Most of the large dams and water diversion structures in the West were built by, or with the assistance of, the Bureau of Reclamation  While the Corps of Engineers built hundreds of flood control and navigation projects, Reclamation's original mission was to develop water supplies, primarily for irrigation to reclaim arid lands in the West for farming and ranching  Reclamation has evolved into an agency that assists in meeting the water demands in the West while working to protect the environment and the public's investment in Reclamation infrastructure  The agency's municipal and industrial water deliveries have more than doubled since 1970  Today, Reclamation manages hundreds of dams and diversion projects, including more than 300 storage reservoirs, in 17 western states  These projects provide water to approximately 10 million acres of farmland and 31 million people  Reclamation is the largest wholesale supplier of water in the 17 western states and the second-largest hydroelectric power producer in the nation  Reclamation facilities also provide substantial flood control, recreation, and other benefits  Reclamation facility operations are often controversial, particularly for their effect on fish and wildlife species and because of conflicts among competing water users during drought conditions  As with the Corps of Engineers, the Reclamation budget is made up largely of individual project funding lines, rather than general programs that would not be covered by congressional earmark requirements  Therefore, as with USACE, these Reclamation projects have often been subject to earmark disclosure rules  The current moratorium on earmarks restricts congressional steering of money directly toward specific Reclamation projects  Reclamation's single largest account, Water and Related Resources, encompasses the agency's traditional programs and projects, including construction, operations and maintenance, dam safety, and ecosystem restoration, among others  Reclamation also typically requests funds in a number of smaller accounts, and has proposed additional accounts in recent years  Implementation and oversight of the Central Utah Project (CUP), also funded by Title II, is conducted by a separate office within the Department of the Interior  For more information, see CRS In Focus IF11158, Bureau of Reclamation: FY2020 Appropriations , by Charles V  Stern  Previous appropriations and recommendations for FY2020 are shown in Table 5   The Energy and Water Development bill has funded all DOE programs since FY2005  Major DOE activities include (1) research and development (R&D) on renewable energy, energy efficiency, nuclear power, fossil energy, and electricity; (2) the Strategic Petroleum Reserve; (3) energy statistics; (4) general science; (5) environmental cleanup; and (6) nuclear weapons and nonproliferation programs  Table 6 provides the recent funding history for DOE programs, which are briefly described further below  DOE's Office of Energy Efficiency and Renewable Energy (EERE) conducts research and development on transportation energy technology, energy efficiency in buildings and manufacturing processes, and the production of solar, wind, geothermal, and other renewable energy  EERE also administers formula grants to states for making energy efficiency improvements to low-income housing units and for state energy planning  The Sustainable Transportation program area includes electric vehicles, vehicle efficiency, and alternative fuels  DOE's electric vehicle program aims to "reduce the cost of electric vehicle batteries by more than half, to less than $100/kWh [kilowatt-hour] (ultimate goal is $80/kWh), increase range to 300 miles, and decrease charge time to 15 minutes or less " DOE's vehicle fuel cell program is focusing on the costs of fuel cells and their hydrogen fuel  According to the FY2020 budget request, "To be cost competitive with gasoline-powered internal combustion engines on a cents-per-mile driven basis, the cost of hydrogen delivered and dispensed needs to be less than $4/gge [gasoline gallon equivalent] (untaxed), and the cost of a durable fuel cell system to be less than $40/kW " Bioenergy goals include the development of "drop-in" fuels—fuels that would be largely compatible with existing energy infrastructure and vehicles, with a goal of $3/gge  Renewable power programs focus on electricity generation from solar, wind, water, and geothermal sources  The solar energy program has a goal of achieving, by 2030, costs of 3 cents per kWh for unsubsidized, utility-scale photovoltaics (PV)  Wind R&D is to focus on early-stage research and testing to reduce costs and improve performance and reliability  The geothermal program is to focus on developing "enhanced geothermal systems" with an electricity generation cost target of 20 8 cents/kWh by 2022  In the energy efficiency program area, the advanced manufacturing program focuses on improving the energy efficiency of manufacturing processes and on the manufacturing of energy-related products  The building technologies program includes R&D on lighting, space conditioning, windows, and control technologies to reduce building energy-use intensity  The energy efficiency program also provides weatherization grants to states for improving the energy efficiency of low-income housing units and state energy planning grants  For more details, see CRS Report R44980, DOE's Office of Energy Efficiency and Renewable Energy (EERE): Appropriations Status , by Corrie E  Clark  The Office of Cybersecurity, Energy Security, and Emergency Response (CESER) was created from programs that were previously part of the Office of Electricity Delivery and Energy Reliability  The programs that were not moved into CESER became part of the DOE Office of Electricity (OE)  OE's mission is to lead DOE efforts "to strengthen, transform, and improve energy infrastructure so that consumers have access to secure and resilient sources of energy " Major priorities of OE are developing a model of North American energy vulnerabilities, pursuing megawatt-scale electricity storage, integrating electric power system sensing technology, and analyzing electricity policy issues  The office also includes the DOE power marketing administrations, which are funded from separate appropriations accounts  CESER is the federal government's lead entity for energy sector-specific responses to energy security emergencies—whether caused by physical infrastructure problems or by cybersecurity issues  The office conducts R&D on energy infrastructure security technology; provides energy sector security guidelines, training, and technical assistance; and enhances energy sector emergency preparedness and response  DOE's Multiyear Plan for Energy Sector Cybersecurity describes the department's strategy to "strengthen today's energy delivery systems by working with our partners to address growing threats and promote continuous improvement, and develop game-changing solutions that will create inherently secure, resilient, and self-defending energy systems for tomorrow " The plan includes three goals that DOE has established for energy sector cybersecurity: strengthen energy sector cybersecurity preparedness; coordinate cyber incident response and recovery; and accelerate game-changing research, development, and demonstration (RD&D) of resilient energy delivery systems  DOE's Office of Nuclear Energy (NE) "focuses on three major mission areas: the nation's existing nuclear fleet, the development of advanced nuclear reactor concepts, and fuel cycle technologies," according to DOE's FY2020 budget justification  It calls nuclear energy "a key element of United States energy independence, energy dominance, electricity grid resiliency, national security, and clean baseload power " The Reactor Concepts program area includes research on advanced reactors, including advanced small modular reactors, and research to enhance the "sustainability" of existing commercial light water reactors  Advanced reactor research focuses on "Generation IV" reactors, as opposed to the existing fleet of commercial light water reactors, which are generally classified as generations II and III  R&D under this program focuses on advanced coolants, fuels, materials, and other technology areas that could apply to a variety of advanced reactors  To help develop those technologies, the Reactor Concepts program is developing a Versatile Test Reactor that would allow fuels and materials to be tested in a fast neutron environment (in which neutrons would not be slowed by water, graphite, or other "moderators")  Research on extending the life of existing commercial light water reactors beyond 60 years, the maximum operating period currently licensed by NRC, is being conducted by this program with industry cost-sharing  The Fuel Cycle Research and Development program includes generic research on nuclear waste management and disposal  One of the program's primary activities is the development of technologies to separate the radioactive constituents of spent fuel for reuse or solidifying into stable waste forms  Other major research areas in the Fuel Cycle R&D program include the development of accident-tolerant fuels for existing commercial reactors, evaluation of fuel cycle options, and development of improved technologies to prevent diversion of nuclear materials for weapons  The program is also developing sources of high-assay low enriched uranium (HALEU), in which uranium is enriched to between 5% and 20% in the fissile isotope U-235, for potential use in advanced reactors  For more information, see CRS Report R45706, Advanced Nuclear Reactors: Technology Overview and Current Issues , by Danielle A  Arostegui and Mark Holt  Much of DOE's Fossil Energy R&D Program focuses on carbon capture and storage for power plants fueled by coal and natural gas  Major activities include Advanced Coal Energy Systems and Carbon Capture, Utilization, and Storage (CCUS); Natural Gas Technologies; and Unconventional Fossil Energy Technologies from Petroleum—Oil Technologies  Advanced Coal Energy Systems includes R&D on modular coal-gasification systems, advanced turbines, solid oxide fuel cells, advanced sensors and controls, and power generation efficiency  Elements of the CCUS program include the following: Carbon Capture subprogram for separating CO 2 in both precombustion and postcombustion systems; Carbon Utilization subprogram for R&D on technologies to convert carbon to marketable products, such as chemicals and polymers; and Carbon Storage subprogram on long-term geologic storage of CO 2 , focusing on saline formations, oil and natural gas reservoirs, unmineable coal seams, basalts, and organic shales  For more information, see CRS In Focus IF10589, FY2019 Funding for CCS and Other DOE Fossil Energy R&D , by Peter Folger, and CRS Report R44472, Funding for Carbon Capture and Sequestration (CCS) at DOE: In Brief , by Peter Folger  The Strategic Petroleum Reserve (SPR), authorized by the Energy Policy and Conservation Act ( P L  94-163 ) in 1975, consists of caverns built within naturally occurring salt domes in Louisiana and Texas  The SPR provides strategic and economic security against foreign and domestic disruptions in U S  oil supplies via an emergency stockpile of crude oil  The program fulfills U S  obligations under the International Energy Program, which avails the United States of International Energy Agency (IEA) assistance through its coordinated energy emergency response plans, and provides a deterrent against energy supply disruptions  DOE has been conducting a major maintenance program to address aging infrastructure and a deferred maintenance backlog at SPR facilities  The federal government has not purchased oil for the SPR since 1994  Beginning in 2000, additions to the SPR were made with royalty-in-kind (RIK) oil acquired by DOE in lieu of cash royalties paid on production from federal offshore leases  In September 2009, the Secretary of the Interior announced a phaseout of the RIK Program  By early 2010, the SPR's capacity reached 727 million barrels  A series of oil sales and purchases since then have resulted in a net reduction of the SPR inventory  Currently, the SPR contains about 649 million barrels  Congress has enacted several laws since 2015 that mandate sales of SPR oil, including the Bipartisan Budget Act of 2015 ( P L  114-74 ), the Fixing America's Surface Transportation Act ( P L  114-94 ), the 21 st Century Cures Act of 2016 ( P L  114-255 ), the 2017 Tax Revision ( P L  115-97 ), the Bipartisan Budget Act of 2018 ( P L  115-123 ), and the Consolidated Appropriations Act, 2018  Broadly considered, this legislation requires oil to be sold from the reserve over the period FY2017 through FY2027, totaling 266 million barrels  For more information, see CRS Report R45577, Strategic Petroleum Reserve: Mandated Sales and Reform , by Robert Pirog, and CRS In Focus IF10869, Reconsidering the Strategic Petroleum Reserve , by Robert Pirog  The DOE Office of Science conducts basic research in six program areas: advanced scientific computing research, basic energy sciences, biological and environmental research, fusion energy sciences, high-energy physics, and nuclear physics  According to DOE's FY2020 budget justification, the Office of Science "is the Nation's largest Federal sponsor of basic research in the physical sciences and the lead Federal agency supporting fundamental scientific research for our Nation's energy future " DOE's Advanced Scientific Computing Research (ASCR) program focuses on developing and maintaining computing and networking capabilities for science and research in applied mathematics, computer science, and advanced networking  The program plays a key role in the DOE-wide effort to advance the development of exascale computing, which seeks to build a computer that can solve scientific problems 1,000 times faster than today's best machines  DOE has asserted that the department is on a path to have a capable exascale machine by the early 2020s  Basic Energy Sciences (BES), the largest program area in the Office of Science, focuses on understanding, predicting, and ultimately controlling matter and energy at the electronic, atomic, and molecular levels  The program supports research in disciplines such as condensed matter and materials physics, chemistry, and geosciences  BES also provides funding for scientific user facilities (e g , the National Synchrotron Light Source II, and the Linac Coherent Light Source-II), and certain DOE research centers and hubs (e g , Energy Frontier Research Centers, as well as the Batteries and Energy Storage and Fuels from Sunlight Energy Innovation Hubs)  Biological and Environmental Research (BER) seeks a predictive understanding of complex biological, climate, and environmental systems across a continuum from the small scale (e g , genomic research) to the large (e g , Earth systems and climate)  Within BER, Biological Systems Science focuses on plant and microbial systems, while Biological and Environmental Research supports climate-relevant atmospheric and ecosystem modeling and research  BER facilities and centers include four Bioenergy Research Centers and the Environmental Molecular Science Laboratory at Pacific Northwest National Laboratory  Fusion Energy Sciences (FES) seeks to increase understanding of the behavior of matter at very high temperatures and to establish the science needed to develop a fusion energy source  FES provides funding for the International Thermonuclear Experimental Reactor (ITER) project, a multinational effort to design and build an experimental fusion reactor  According to DOE, ITER "aims to provide fusion power output approaching reactor levels of hundreds of megawatts, for hundreds of seconds " However, many U S  analysts have expressed concern about ITER's cost, schedule, and management, as well as the budgetary impact on domestic fusion research  The High Energy Physics (HEP) program conducts research on the fundamental constituents of matter and energy, including studies of dark energy and the search for dark matter  Nuclear Physics supports research on the nature of matter, including its basic constituents and their interactions  A major project in the Nuclear Physics program is the construction of the Facility for Rare Isotope Beams at Michigan State University  A separate DOE office, the Advanced Research Projects Agency—Energy (ARPA-E), was authorized by the America COMPETES Act ( P L  110-69 ) to support transformational energy technology research projects  DOE budget documents describe ARPA-E's mission as overcoming long-term, high-risk technological barriers to the development of energy technologies  For more details, see CRS Report R45150, Federal Research and Development (R&D) Funding: FY2019 , coordinated by John F  Sargent Jr  DOE's Loan Programs Office provides loan guarantees for projects that deploy specified energy technologies, as authorized by Title 17 of the Energy Policy Act of 2005 (EPACT05, P L  109-58 ), direct loans for advanced vehicle manufacturing technologies, and loan guarantees for tribal energy projects  Section 1703 of the act authorizes loan guarantees for advanced energy technologies that reduce greenhouse gas emissions, and Section 1705 established a temporary program for renewable energy and energy efficiency projects  Title 17 allows DOE to provide loan guarantees for up to 80% of construction costs for eligible energy projects  Successful applicants must pay an up-front fee, or "subsidy cost," to cover potential losses under the loan guarantee program  Under the loan guarantee agreements, the federal government would repay all covered loans if the borrower defaulted  Such guarantees would reduce the risk to lenders and allow them to provide financing at below-market interest rates  The following is a summary of loan guarantee amounts that have been authorized (loan guarantee ceilings) for various technologies: $8 3 billion for nonnuclear technologies under Section 1703; $2 0 billion for unspecified projects from FY2007 under Section 1703; $18 5 billion for nuclear power plants ($12 0 billion committed); $4 billion for loan guarantees for uranium enrichment plants; $1 18 billion for renewable energy and energy efficiency projects under Section 1703, in addition to other loan guarantee ceilings, which can include applications that were pending under Section 1705 before it expired; and In addition to the loan guarantee ceilings above, an appropriation of $161 million was provided for subsidy costs for renewable energy and energy efficiency loan guarantees under Section 1703  If the subsidy costs averaged 10% of the loan guarantees, this funding could leverage loan guarantees totaling about $1 6 billion  The only loan guarantees under Section 1703 were $8 3 billion in guarantees provided to the consortium building two new reactors at the Vogtle plant in Georgia  DOE committed an additional $3 7 billion in loan guarantees for the Vogtle project on March 22, 2019  Another nuclear loan guarantee is being sought by NuScale Power to build a small modular reactor in Idaho  In the absence of explosive testing of nuclear weapons, the United States has adopted a science-based program to maintain and sustain confidence in the reliability of the U S  nuclear stockpile  Congress established the Stockpile Stewardship Program in the National Defense Authorization Act for Fiscal Year 1994 ( P L  103-160 )  The goal of the program, as amended by the National Defense Authorization Act for Fiscal Year 2010 ( P L  111-84 , §3111), is to ensure "that the nuclear weapons stockpile is safe, secure, and reliable without the use of underground nuclear weapons testing " The program is operated by NNSA, a semiautonomous agency within DOE established by the National Defense Authorization Act for Fiscal Year 2000 ( P L  106-65 , Title XXXII)  NNSA implements the Stockpile Stewardship Program through the activities funded by the Weapons Activities account in the NNSA budget  Most of NNSA's weapons activities take place at the nuclear weapons complex, which consists of three laboratories (Los Alamos National Laboratory, NM; Lawrence Livermore National Laboratory, CA; and Sandia National Laboratories, NM and CA); four production sites (Kansas City National Security Campus, MO; Pantex Plant, TX; Savannah River Site, SC; and Y-12 National Security Complex, TN); and the Nevada National Security Site (formerly the Nevada Test Site)  NNSA manages and sets policy for the weapons complex; contractors to NNSA operate the eight sites  Radiological activities at these sites are subject to oversight and recommendations by the independent Defense Nuclear Facilities Safety Board, funded by Title IV of the annual Energy and Water Development appropriations bill  There are three major program areas in the Weapons Activities account  Directed Stockpile Work includes the life extension programs (LEPs) on existing warheads and stockpile services programs that monitor their condition; and maintaining warheads through repairs, refurbishment, and modifications  It also includes funding for research and development in support of specific warheads, and dismantlement of warheads that have been removed from the stockpile  This last activity received more significant funding as the number of warheads in the U S  stockpile declined after the Cold War; it also provides a source for critical components for warheads remaining in the stockpile  Directed Stockpile Work also involves programs that work on the materials needed for nuclear warheads, including the plutonium pits that are the core of the weapons  Research, Development, Test, and Evaluation (RDT&E) includes five programs that focus on "efforts to develop and maintain critical capabilities, tools, and processes needed to support science based stockpile stewardship, refurbishment, and continued certification of the stockpile over the long-term in the absence of underground nuclear testing " This area includes operation of some large experimental facilities, such as the National Ignition Facility at Lawrence Livermore National Laboratory  Infrastructure and Operations has, as its main funding elements, material recycle and recovery, recapitalization of facilities, and construction of facilities  The latter include two major projects that have generated congressional controversy: the Uranium Processing Facility (UPF) at the Y-12 National Security Complex and the Chemistry and Metallurgy Research Replacement (CMRR) Project, which deals with plutonium, at Los Alamos National Laboratory  Nuclear Weapons Activities also has several smaller programs, including the following: Secure Transportation Asset, providing for safe and secure transport of nuclear weapons, components, and materials; Defense Nuclear Security, providing operations, maintenance, and construction funds for protective forces, physical security systems, personnel security, and related activities; and Information Technology and Cybersecurity, whose elements include cybersecurity, secure enterprise computing, and Federal Unclassified Information Technology  For more information, see CRS Report R44442, Energy and Water Development Appropriations: Nuclear Weapons Activities , by Amy F  Woolf, and CRS Report R45306, The U S  Nuclear Weapons Complex: Overview of Department of Energy Sites , by Amy F  Woolf and James D  Werner  DOE's nonproliferation and national security programs provide technical capabilities to support U S  efforts to prevent, detect, and counter the spread of nuclear weapons worldwide  These programs are administered by NNSA's Office of Defense Nuclear Nonproliferation  The Materials Management and Minimization program conducts activities to minimize and, where possible, eliminate stockpiles of weapons-useable material around the world  Major activities include conversion of reactors that use highly enriched uranium (useable for weapons) to low-enriched uranium, removal and consolidation of nuclear material stockpiles, and disposition of excess nuclear materials  Global Materials Security has three major program elements  International Nuclear Security focuses on increasing the security of vulnerable stockpiles of nuclear material in other countries  Radiological Security promotes the worldwide reduction and security of radioactive sources, including the removal of surplus sources and substitution of technologies that do not use radioactive materials  Nuclear Smuggling Detection and Deterrence works to improve the capability of other countries to halt illicit trafficking of nuclear materials  Nonproliferation and Arms Control works to "to support U S  nonproliferation and arms control objectives to prevent proliferation, ensure peaceful nuclear uses, and enable verifiable nuclear reductions," according to the FY2020 DOE justification  This program conducts reviews of nuclear export applications and technology transfer authorizations, implements treaty obligations, and analyzes nonproliferation policies and proposals  Other programs under Defense Nuclear Nonproliferation include research and development and construction, which advances nuclear detection and nuclear forensics technologies  Nuclear Counterterrorism and Incident Response provides "interagency policy, contingency planning, training, and capacity building" to counter nuclear terrorism and strengthen incident response capabilities, according to the FY2020 budget justification  The development and production of nuclear weapons during half a century since the beginning of the Manhattan Project resulted in a waste and contamination legacy managed by DOE that continues to present substantial challenges today  DOE also manages legacy environmental contamination at sites used for nondefense nuclear research  In 1989, DOE established the Office of Environmental Management primarily to consolidate its responsibilities for the cleanup of former nuclear weapons production sites that had been administered under multiple offices  DOE's nuclear cleanup efforts are broad in scope and include the disposal of large quantities of radioactive and other hazardous wastes generated over decades; management and disposal of surplus nuclear materials; remediation of extensive contamination in soil and groundwater; decontamination and decommissioning of excess buildings and facilities; and safeguarding, securing, and maintaining facilities while cleanup is underway  DOE's cleanup of nuclear research sites adds a nondefense component to the EM's mission, albeit smaller in terms of the scope of their cleanup and associated funding  DOE has identified more than 100 separate sites in over 30 states that historically were involved in the production of nuclear weapons and nuclear energy research for civilian purposes  The geographic scope of these sites is substantial, collectively encompassing a land area of approximately 2 million acres  Cleanup remedies are in place and operational at the majority of these sites  Responsibility for the long-term stewardship of them has been transferred to the Office of Legacy Management and other offices within DOE for the operation and maintenance of cleanup remedies and monitoring  Some of the smaller sites for which DOE initially was responsible were transferred to the Army Corps of Engineers in 1997 under the Formerly Utilized Sites Remedial Action Program (FUSRAP)  Once USACE completes the cleanup of a FUSRAP site, it is transferred back to DOE for long-term stewardship under the Office of Legacy Management, which is separate from EM and has its own funding account  Three appropriations accounts fund the Office of Environmental Management  The Defense Environmental Cleanup account is the largest in terms of funding, and it finances the cleanup of former nuclear weapons production sites  The Non-Defense Environmental Cleanup account funds the cleanup of federal nuclear energy research sites  Title XI of the Energy Policy Act of 1992 ( P L  102-486 ) established the Uranium Enrichment Decontamination and Decommissioning Fund to pay for the cleanup of three federal facilities that enriched uranium for national defense and civilian purposes  Those facilities are located near Paducah, KY; Piketon, OH (Portsmouth plant); and Oak Ridge, TN  Title X of P L  102-486 authorized the reimbursement of uranium and thorium producers for their costs of cleaning up contamination attributable to uranium and thorium sold to the federal government  The adequacy of funding for the Office of Environmental Management to attain cleanup milestones across the entire site inventory has been a recurring issue  Cleanup milestones are enforceable measures incorporated into compliance agreements negotiated among DOE, the Environmental Protection Agency, and the states  These milestones establish time frames for the completion of specific actions to satisfy applicable requirements at individual sites  DOE's four Power Marketing Administrations were established to sell the power generated by the dams operated by the Bureau of Reclamation and the Army Corps of Engineers  Preference in the sale of power is given to publicly owned and cooperatively owned utilities  The PMAs operate in 34 states; their assets consist primarily of transmission infrastructure in the form of more than 33,000 miles of high voltage transmission lines and 587 substations  PMA customers are responsible for repaying all power program expenses, plus the interest on capital projects  Since FY2011, power revenues associated with the PMAs have been classified as discretionary offsetting receipts (i e , receipts that are available for spending by the PMAs), thus the agencies are sometimes noted as having a "net-zero" spending authority  Only the capital expenses of WAPA and SWPA require appropriations from Congress  For more information, see CRS Report R45548, The Power Marketing Administrations: Background and Current Issues , by Richard J  Campbell  Independent agencies that receive funding in Title IV of the Energy and Water Development bill include the Nuclear Regulatory Commission (NRC), the Appalachian Regional Commission (ARC), and the Defense Nuclear Facilities Safety Board  NRC is by far the largest of the independent agencies, with a total budget of more than $900 million  However, as noted in the description of NRC below, about 90% of NRC's budget is offset by fees, so that the agency's net appropriation is less than half of the total funding in Title IV  The recent appropriations history for all the Title IV agencies is shown in Table 7   Established in 1965, the Appalachian Regional Commission (ARC) is a regional economic development agency  It awards grants and contracts to state and local governments and nonprofit organizations to foster economic opportunities, improve workforce skills, build critical infrastructure, strengthen natural and cultural assets, and improve leadership skills and capacity in the region  ARC's authorizing statute defines the Appalachian Region as including all of West Virginia and parts of Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, and Virginia  More than 25 million people currently live in the region as defined  ARC provides funding to several hundred projects each year, with particular focus on the region's most economically distressed counties  Major areas of infrastructure support broadband communication systems, transportation, and water and wastewater systems  ARC has supported development of the Appalachian Development Highway System (ADHS), a planned 3,000-mile system of highways that connect with the U S  Interstate Highway System  According to ARC, 90 5% of ADHS is currently "complete, open to traffic, or under construction " NRC is an independent agency that establishes and enforces safety and security standards for nuclear power plants and users of nuclear materials  Major appropriations categories for NRC are shown in Table 8   Nuclear Reactor Safety is NRC's largest program and is responsible for licensing and regulating the U S  fleet of 98 power reactors, plus two under construction  NRC is also responsible for licensing and regulating nuclear waste facilities, such as the proposed underground nuclear waste repository at Yucca Mountain, NV  NRC is required by law to offset about 90% of its total budget, excluding specified items, through fees charged to nuclear reactor owners and other holders of NRC licenses  As a result, NRC's net appropriation can be as low as 10% of its total funding level, depending on the activities that Congress excludes from fee recovery  For example, excluded items in NRC's FY2019 enacted appropriation are prior-year balances, development of advanced reactor regulations, and international activities  The following hearings have been held by the Energy and Water Development subcommittees of the House and Senate Appropriations Committees on the FY2020 budget request  Testimony and opening statements are posted on most of the web pages cited for each hearing, along with webcasts in many cases  Department of Energy , March 26, 2019, https://appropriations house gov/legislation/hearings/budget-department-of-energy   Corps of Engineers (Civil Works) and the Bureau of Reclamation , March 27, 2019, https://appropriations house gov/legislation/hearings/budget-us-army-corps-of-engineers-and-bureau-of-reclamation   National Nuclear Security Administration , April 2, 2019, https://appropriations house gov/legislation/hearings/budget-department-of-energy-national-nuclear-security-administration  DOE Science, Energy, and Environmental Management Programs , April 3, 2019, https://appropriations house gov/legislation/hearings/budget-science-energy-and-environmental-management-programs  Department of Energy , March 27, 2019, https://www appropriations senate gov/hearings/review-of-the-fy2020-budget-request-for-the-us-department-of-energy   National Nuclear Security Administration , April 3, 2019, https://www appropriations senate gov/hearings/review-of-the-fy2020-budget-request-for-the-national-nuclear-security-administration   U S  Army Corps of Engineers and the Bureau of Reclamation , April 10, 2019, https://www appropriations senate gov/hearings/review-of-the-fy2020-budget-requests-for-army-corps-of-engineers-and-bureau-of-reclamation  
Report 2:  Some mergers that did not qualify as inversions under the tax law also occurred  The most significant in size was the proposed Pfizer merger  On November 23, 2015, Pfizer announced a proposed merger with Allergan, an Irish company, and the move of its headquarters to Ireland  This merger, which would result in the largest pharmaceutical company in the world, is not covered under the anti-inversion rules because Pfizer will own 56% of the value of the new firm  Allergan itself is the product of a merger involving both stock and cash acquisition by Actavis in 2015, with former Allergen shareholders owning a minority of the new company  Thus, this merger as well was not an inversion under the tax law  Actavis, in turn, was a former U S  firm that inverted by merger with Warner Chillcott, an Irish firm, in 2013 (where the former shareholders of the U S  firm acquired 77% of the stock)  Pfizer terminated its merger with Allergen after the April 4, 2016, regulations (discussed below)  Other notable mergers not subject to anti-inversion rules were the acquisition of Salix, a pharmaceutical company, by Valeant (a Canadian company); the acquisition of Auxilium by Endo (after Auxilium backed out of an inversion with Canadian firm QLT); the merger of Cyberonics with Italy's Sorin (to be headquartered in the U K ); and the merger of Broadcom (a chipmaker) with Avago (a Singapore firm)  Information and analytics provider HIS announced a merger with Markit Ltd, a U K  firm, to be headquartered in the U K , but the ownership share of HIS would be less than 60% of the firm  Johnson Controls also merged with Tyco, one of the earlier inverted firms  The 2015 Treasury regulations appear to have more limited consequences for inversions than the 2014 regulations did  Three regulatory changes were made by the notice  First, in the case where the foreign parent is a tax resident of a third country, stock issued by that parent to the existing foreign firm will be disregarded for purposes of the ownership requirement  That change will prevent a U S  firm from merging with a partner and then choosing a tax friendly third country to headquarter in  The second provision would clarify the so called "anti-stuffing" rules, where the foreign firm's size is inflated by adding assets to that firm  The notice clarifies that this rule applies to any assets, not just passive assets  Third, the current business activity exception requires 25% of business activity to be in the foreign country where the new parent is created or organized, but does not require it to be a foreign parent  This rule requires the business activity to be in the foreign parent  It prevents inversion based on the business activity test when the foreign parent has a tax residence in another country without substantial business activities  On April 4, 2016, the Treasury Department issued temporary and proposed regulations formalizing rules contained in Notices 2014-52 and 2015-79 limiting corporate tax inversions, as well as adding new rules addressing inversions and earnings-stripping transactions  In response to these new regulations, the proposed merger between Pfizer and Allergen PLC has been terminated  The April 4, 2016, Treasury regulations put in place several anti-inversion rules that target groups that have engaged in a series of inversion or acquisition transactions as well as a rule that restricts postinversion asset dilution  The temporary regulations target inversion transactions involving a new foreign parent that previously acquired one or more U S  entities in inversions or acquisitions in which the new foreign parent issued stock  These prior acquisitions would generally increase the value of the foreign entity, enabling it to subsequently engage in an inversion transaction with a larger U S  company while remaining below the 60% or 80% ownership thresholds  The temporary regulations disregard stock of the new foreign parent to the extent the value of such stock is attributable to its prior U S  entity acquisitions during the prior three years  According to analysis by Americans for Tax Fairness, the implementation of this rule would have increased Pfizer's share of the merged company to roughly 70% from 56% prior to the rule  Similar to the multiple domestic entity acquisition rule, the multiple-step acquisition rule targets certain inversions that are structured as back-to-back foreign acquisitions  Specifically, it targets transactions that are part of a plan in which a foreign corporation acquires substantially all of the assets of a U S  entity and, subsequent to this first acquisition, a second foreign corporation acquires substantially all of the assets of the first foreign corporation  The temporary regulations, under certain circumstances, treat each acquisition as an acquisition of a U S  entity that may be subject to anti-inversion rules  Unlike the multiple domestic entity acquisition rule, which has a three-year look-back period, the multiple-step acquisition rule can be applied to all acquisitions that are part of the same plan regardless of time  A third rule modified existing regulations to restrict the ability of inverted companies to avoid paying tax on unrealized gains (under Section 965) through a transfer to a controlled foreign corporation (CFC) (under Section 351)  This would address situations where a CFC of an inverted U S  company engages in a postinversion exchange that could dilute a U S  shareholder's indirect interest in the exchanged asset, allowing the U S  shareholder to avoid U S  tax on any realized gain in the asset that is not recognized at the time of the transfer  The rule requires a CFC of an inverted U S  group to recognize all realized gain with respect to any such postinversion Section 351 exchange  The earnings-stripping regulations aim to restrict the ability of foreign-parent groups to shift earnings out of the United States through dividends or other economically similar transactions (under Section 385)  In these cases certain related-party debt will be characterized as equity for tax purposes  The result of equity classification is that interest deductions will be disallowed, and withholding obligations of 30% (or lower rate based on an applicable income tax treaty) could ensue  The regulations do not normally apply for related-party debt that is incurred to fund actual business investment, such as building or equipping a factory  The regulations also require documentation of debt instruments issued and held by certain members of an expanded group to establish that such instruments are properly characterized as debt  The regulations also allow the IRS on audit to treat an instrument issued to a related party as in part debt and in part equity  The final regulations issued on October 21, 2016, scaled back the original regulations in response to the comment period  The final regulations removed the general bifurcation rule that would have allowed a debt instrument to be classified as part debt and part equity and an exemption for debt for foreign issuers  The rules also provided exemptions for cash pools (a pool of cash to be accessed for short-term needs), short-term loans, regulated financial entities, and pass-throughs (firms not taxed as corporations)  The Treasury delayed documentation rules for a year on July 28, 2017  Treasury announced on July 7, 2017, that these debt-equity regulations were to be among eight rules targeted for review  The Treasury issued final regulations for the temporary regulations introduced in April 2016 on July 12, 2018, as TD 9834 with minor changes  Two days after the regulations were issued, Pfizer withdrew from its merger with Allergen, an Irish-based company that was an inverted firm  It appears that this merger was affected by the multiple-entity rule, which has come to be called "serial inversion " Mergers between Shire (Ireland based) and Basalta, and between HIS and Markit Group Inc  (U K  based) went forward  The CF Industries merger with OCI NV (based in the Netherlands) was also called off; Johnson Controls and Tyco went forward  A merger between Konecranes (a Finnish firm) and Terex was scaled down to an acquisition of a share of Terex with the U S  firm owning 25%, thus avoiding the effect of regulations  In May 2016 Cardtronics, Inc , an ATM operator, announced a plan to move to the U K  using the substantial business activities test  Also in May, an oil and gas industry service and technology firm announced a merger with Technip SA (France) to form a U K  company, with each firm holding about half the stock and thus avoiding any of the recent regulations and establishing a new headquarters in another country  In 2017, Praxaire (a U S  industrial gas company) announced a merger with Linde AG (a German gas and technology company), also with each owning half of the new company  As noted in the introduction, statistical data suggest a decline in inversions from 2015 to 2016, and again from 2016 to 2017, and these data are consistent with the limited news reports of major inversions  Pfizer's CEO has recently indicated that deals are on hold generally while tax reform is being considered  The 2017 legislation not only made fundamental changes to the overall treatment of corporate income at home and abroad, but also adopted several provisions specifically aimed at inverted corporations (those with 60% to 80% ownership)  Under the new law, existing untaxed earnings held abroad are taxed under a deemed repatriation rule, but at a lower rate (8% for earnings reinvested in noncash assets and 15 5% for earnings held as cash or cash equivalents)  A special recapture rule applies on deemed repatriations of newly inverted firms  This recapture rule applies if a firm first becomes an expatriated entity at any time during the 10-year period beginning on December 22, 2017  In this case, the tax will be increased from 8% and 15 5% to 35% tax for the entire deemed repatriation, with no foreign tax credit allowed for the increase in tax rate  The additional tax is due on the full amount of the deemed repatriation in the first tax year in which the taxpayer becomes an expatriated entity  BEAT excludes payments which reduce gross receipts with the result that payment for the cost of goods sold is not included under BEAT  An exception applies for firms that invert after November 9, 2017, where payments to a foreign parent or any foreign firm in the affiliated for cost of goods sold is included in BEAT  The constructive ownership rules for purposes of determining 10% U S  shareholders, whether a corporation is a CFC and whether parties satisfy certain relatedness tests, were expanded in the 2017 tax revision  Specifically, the new law treats stock owned by a foreign person as attributable to a U S  entity owned by the foreign person (so-called "downward attribution")  As a result, stock owned by a foreign person may generally be attributed to (1) a U S  corporation, 10% of the value of the stock of which is owned, directly or indirectly, by the foreign person; (2) a U S  partnership in which the foreign person is a partner; and (3) certain U S  trusts if the foreign person is a beneficiary or, in certain circumstances, a grantor or a substantial owner  The downward attribution rule was originally conceived to deal with inversions  In an inversion, without downward attribution, a subsidiary of the original U S  parent could lose CFC status if it sold enough stock to the new foreign parent so the U S  parent no longer had majority ownership  With downward attribution, the ownership of stock by the new foreign parent in the CFC is attributed to the U S  parent, so that the subsidiary continues its CFC status, making it subject to any tax rules that apply to CFCs (such as Subpart F and repatriation taxes under the old law, and Subpart F and GILTI under the new law)  Dividends (like capital gains) are allowed lower tax rates than the rates applied to ordinary income  The rates are 0%, 15%, and 20% depending on the rate bracket that ordinary income falls into  Certain dividends received from foreign firms (those that do not have tax treaties and PFICs ) are not eligible for these lower rates  Dividends paid by firms that inverted after the date of enactment of P L  115-97 are added to the list of those not eligible for the lower rates  In 2004, an excise tax of 15% was imposed on stock compensation received by insiders in an expatriated corporation; the new law increases it to 20%, effective on the date of enactment for corporations that first become expatriated after that date  As noted earlier, there are no aggregate data available yet for 2018, but there are also indications that most tax-motivated inversions had already been discouraged by the 2016 regulations  Considering announcements of individual companies, one planned inversion, by Assurant, Inc  was revised to retain the headquarters in the United States  Ohio-based Dana, Inc  announced plans to merge and move the headquarters to the U K , although the merger would leave the U S  shareholders with less than 60% ownership, and therefore not make them subject to anti-inversion penalties  A recent announcement indicated that the Dana merger was called off  Some firms may be considering reversing their headquarters decisions  The AJCA was successful at limiting a form of inversions, at least initially  In particular, the AJCA stopped the practice of basic "naked inversions," in which little activity or presence in the new jurisdiction is required and the new parent is domiciled in a tax haven  Further, through regulation, Treasury has limited the use of the substantial business activity test safe harbor to invert  Recent activity (as noted above), however, suggests that mergers continued to be used as a vehicle for corporate inversions after these changes  These more recent mergers have increasingly resulted in a U K  parent company (e g , FMC-Technip, HIS-Markit), due to policy decisions by the U K  government  Specifically, the U K  lowered its corporate tax rate and adopted a territorial tax system  In addition, anti-abuse provisions for foreign source income were weakened by the European Union courts  The U K  has also proposed taxing certain intangible income at a 10% rate  (This is referred to as a patent box ) To restrict the occurrence of tax-motivated inversions, both a general reform of the U S  corporate tax and specific provisions to deal with tax-motivated international mergers were discussed  Some important changes were made in 2017; other options remain  Interest in reforming the corporate income tax was long-standing, including calling for explicit accommodation of international concerns  As noted earlier, two aspects of the U S  corporate tax system are particularly relevant to corporate location decisions: the corporate tax rate and the taxation of foreign-source earnings  Taken together, these factors, under prior law, could yield a substantial reduction in taxes paid  In the case of the proposed merger of Forest Laboratories Inc  (a U S  company) and Actavis (an Irish company) in 2014, the tax reduction was estimated to be roughly $100 million per year  Prior to the 2017 changes, the U S  corporate statutory tax rate was higher than both the average statutory rates of the other Organisation for Economic Co-operation and Development (OECD) countries and that of the 15 largest economies in the world  Many asserted that the U S  statutory tax rate needed to be lowered to reduce the incentive for inversion transactions  With the rate lowered from 35% to 21%, the combined central and subnational corporate tax rates are similar to most rates in the OECD  While lowering the corporate tax rate would reduce the incentive to invert, there are reasons to suggest that it would be impractical to reduce the rate to the level needed to stop inversions  Namely, to stop inversions through a reduction in the corporate tax rate would require a U S  corporate tax rate set equal to the lowest tax rate of a destination company, or zero  A lower corporate tax rate alone reduced the incentive for corporate inversions, primarily by reducing the tax rate applied to repatriated earnings  For a company like Pfizer, with large foreign earnings, a rate reduction could yield significantly lower taxes paid  However, as discussed below, the benefit of a lowered rate is negligible relative to the benefit to corporate taxpayers afforded by territorial tax systems, when income earned in low- or no-tax foreign jurisdictions is never subject to U S  tax  Two factors present challenges for lowering the corporate tax rate further  First, if revenue neutrality is a goal, there may not be enough base-broadening provisions with revenue offsets to provide deep cuts in the corporate tax; and, if such offsets were found, they might have their own consequences for investment  Reducing the corporate tax without corresponding base broadening would likely reduce corporate tax revenue, adding to chronic budget deficits  Prior to the 2017 revision, the United States was one of the few countries that had a worldwide tax system and levied a tax on the foreign-source income of domestic corporations  Changing corporate tax residence to a country with a territorial tax system (where foreign earnings would not be taxed at all) was thought to drive inversion decisions  This issue led to proposals for the United States to adopt a territorial tax system to stop inversion transactions  One concern about adopting a territorial tax system is the strain it would likely place on the current transfer pricing system  From this perspective, the worldwide tax system provided a backstop on the amount of profit shifting or base erosion possible, because shifted profits will eventually be repatriated  Under a territorial tax system, this is not the case  Research has found evidence of significant profit shifting, especially related to mobile intellectual property, suggesting a lot of income from foreign sources is really U S  income in disguise  Numerous other issues surround the adoption of a U S  territorial tax  For example, while some supported a territorial tax to eliminate the incentive to keep earnings abroad, others opposed it because it likely discourages domestic investment and activity in the United States  The revisions in 2017 maintained a worldwide system, but with some changes  Income from U S  subsidiaries is taxed on a current basis but at a lower rate and with an exemption for a deemed return on tangible assets  It also provided a subsidy for locating intangible assets with earnings from abroad in the United States  Many of the inverting firms had significant intangible assets, and it is not clear whether this new regime (a lower tax rate but on a current basis) is more or less generous to firms considering inverting  Moving closer to a pure territorial tax, as in the case of a rate reduction, would likely reduce corporate tax revenue and add to current budget pressures unless it is offset by other tax increases, although this effect would be less costly at the lower 21% tax rate  In 2027, GILTI is projected to raise $21 billion  GILTI could be retained and the rate lowered or the temporarily lower rate could be made permanent  There has been some agreement that adopting a territorial tax without some significant anti-abuse provisions could be problematic, as it would likely increase profit shifting abroad by U S  firms  Evidence suggests that administrative remedies were successful at dramatically slowing inversions; the targeted legislative changes in the 2017 Act may have had some impact as well  There are further changes that could be made to discourage inversions  This section discusses the history of these proposals, both legislative and administrative  One approach would be to extend the rate recapture enacted in the 2017 Act for a period longer than 10 years, or to make it apply indefinitely to future inversions  A second alternative is to directly restrict the ability of U S  firms to invert by merger  The President's FY2015, FY2016, and FY2017 budget proposals contained a provision that would have further restricted the use of inversions  The proposal would modify the 80% test enacted in the AJCA to a 50% test and eliminate the 60% test  In effect, this proposal would reduce the percentage of shareholders that are owners of the "old U S  company" and the "new foreign merged company " The proposal would also require that the new foreign corporation be managed and controlled from outside the United States and prohibit transactions where the new foreign company has substantial business activities in the United States  In November 2015, then-Senate Finance Committee Chairman Hatch indicated the possibility of adding an anti-inversion provision to legislation to extend expired provisions  Many of these bills were introduced in the 115 th Congress  H R  1931 (Doggett), the Corporate EXIT Fairness Act, and H R  3434 (Levin) and S  1636 (Durbin, along with a number of cosponsors), the Stop Corporate Inversions Act, would have treated all mergers as U S  firms when the U S  firm's shareholders hold more than 50% or when management and control primarily takes place in the United States  H R  1932 (Doggett) and S  851 (Whitehouse), as with bills introduced in the 114 th Congress, would have included anti-inversion provisions as part of a broader proposal to address tax havens and deferral  H R  3603 (Levin) would have addressed earnings stripping of inverted corporations  H R  3424 (DeLauro) would disallow federal contracts for inverted firms  H R  1451 (Schakowsky) and S  586 (Sanders) would make major changes in the tax treatment of foreign source income and include anti-inversion rules  Following the change in the international system adopted at the end of 2017, Representative Doggett and Senator Whitehouse introduced the "No Tax Break for Outsourcing Act" ( H R  5108 , S  2459 ) which, in addition to other changes, would have treated foreign corporations that are managed and controlled in the United States as domestic corporations and treated inverted firms as U S  firms when the shareholders of the former U S  company own more than 50% of the shares  These bills would have also limited interest deductions in the United States to the proportionate share of the firm's assets  The last proposal (to allocate worldwide interest) was in both the House and Senate versions of the legislation ( H R  1 ; 115 th Congress) in somewhat different form but was not retained in the final legislation  While this proposal was not specifically targeted at inverted firms it would have increased the restrictions that limit earnings stripping  Former President Obama had encouraged Congress to act directly to limit inversions, but had also indicated on August 6, 2014, that administrative changes to limit inversions were under examination  Prior to that announcement, Steve Shay, a Harvard professor and former practitioner and Treasury official, outlined two regulatory actions that he believed could be taken  The first would limit earnings stripping by reclassifying debt as equity due to excessive related party debt in an inversion  (The second provision is no longer relevant under the new international tax regime ) A number of other administrative proposals that have been suggested (such as provisions relating to taxing accumulated deferred earnings) are no longer relevant and others have been adopted in the regulatory changes discussed above  Expanding the scope of Section 7874 (which treats inverted firms as U S  firms) by combining multiple transactions into single ones, or vice versa  The scope of Section 7874 could also be expanded by treating certain stock as disqualified (because it is expected to be held temporarily or because it is accompanied by restrictions on voting rights); this provision was adopted in Treasury regulations; Potentially recognizing accumulated deferred earnings as currently taxable under authority such as Subpart F, Section 367, or other rules (this provision is no longer relevant with the end of deferral, but it may have influenced the decision to tax deferred earnings of newly inverted firms at the full 35% rate for the next 10 years); Issuing regulations that would generally tighten restrictions on interest deductions under the thin capitalization rules of Section 163(j)  These changes would probably apply to corporations in general, and not just to inverted corporations (this change was made in the 2017 tax revision); Stricter regulations under Section 367 to immediately include foreign earnings in the case of actions that attempt to move foreign operations out from under the U S  parent  This would make future earnings of these operations nontaxable; Strengthening and modernizing the effectively connected income rules that determined whether trade or business activity is taking place in the United States by foreign firms; and Closely monitoring the creation of non-U S  subsidiaries owned by the foreign parent after inversion, and ensuring that assets (including intangibles such as inventions, knowhow, etc ) transferred from the U S  firm are transferred at arms-length prices  There is disagreement among experts about whether the types of regulatory changes discussed in this section are feasible or desirable  A number of legislative proposals were advanced in 2014, when the wave of inversions through merger began  Representative Levin, the ranking member of the House Ways and Means Committee, introduced the Stop Corporate Inversions Act of 2014 ( H R  4679 ), which would have reflected the Administration's proposed changes, retroactive to May 8, 2014  The inversion would have not been recognized if the U S  stockholders had 50% of the shares or if 25% of the business activity is in the United States  A companion bill, which would have sunset in two years to provide time for tax reform, was introduced in the Senate by Senator Levin in 2014 ( S  2360 )  The Joint Committee on Taxation estimated the permanent proposal to gain $19 5 billion in revenue over FY2015-FY2024  The two-year proposal would have raise $0 8 billion over the same period  In the 114 th Congress, these legislative proposals were introduced as H R  415 (Levin) and S  198 (Durbin)  Senator Casey proposed an anti-inversion amendment to an education bill ( S  1177 )  In the 114 th Congress, H R  297 (Doggett) and S  174 (Whitehouse) included anti-inversion provisions as part of a broader proposal to address tax haven abuses and restrict the benefits of deferral  S  922 (Sanders) and H R  1790 (Schakowsky) also included anti-inversion provisions, as well as earnings-stripping provisions (discussed below) and broader provisions, including the repeal of deferral  In 2014 a number of legislative proposals were introduced that would limit the tax benefits associated with inversions for certain corporations  For example, H R  1554 (Doggett), H R  3666 (DeLauro), H R  3793 (Maffei), S  268 (Levin), S  1533 (Levin), and S  1844 (Shaheen) would each treat corporations managed and controlled from the United States as domestic corporations regardless of their legal tax home or status as an inverted company  This provision was also included in S  922 (Sanders) and H R  1790 (Schakowsky)  Other proposals in 2014, H R  694 (Schakowsky) and S  250 (Sanders), would have eliminated deferral (taxing foreign source income currently), in addition to limiting the benefits of inversions when management and control continues to reside in the United States  Legislative proposals were also under discussion in 2014 by Representative Levin (announced July 31, 2014) and by Senator Schumer (announced August 14, 2014) to address earnings stripping, where foreign parent companies borrow from the U S  subsidiary to increase interest deductions and reduce taxable income in the United States  Both of these proposals would have tightened the rules allowing interest deductions by reducing the current limit on interest deductions relative to adjusted income from 50% to 25% and repealing an alternative safe-harbor debt-to-equity test  Both proposals would have also eliminated or limited interest carryforwards  The Schumer proposal was intended to apparently apply to inverted firms while the Levin proposal would have applied generally  The Levin proposal would have also limited other transactions between related parties within the firm that allow untaxed investment of funds in the United States  The restrictions on interest in the Levin bill were the same as those initially proposed in the House in 2004  Senator Schumer introduced his proposal, S  2786 , the Corporate Inverters Earnings Stripping Reform Act of 2014  Its limits on interest deductions would have applied to inverted firms where U S  shareholders own more than 50% of the firm  The restriction also would have applied to firms that inverted using the substantial business activities test  The bill had nine Democratic cosponsors; five of them were on the Senate Finance Committee  In the 114 th Congress, S  922 (Sanders) and H R  1790 (Schakowsky) included general earnings-stripping provisions for firms with a foreign parent  Earnings stripping provisions were also addressed in the report of the Senate Finance Committee's working group on Tax Reform  H R  5278 (DeLauro) and S  2704 (Levin), introduced May 30, 2014, would have disallowed awarding federal contracts to inverted firms  These proposals were introduced in the 114 th Congress as H R  1809 (DeLauro) and S  975 (Durbin)  In 2014, Senators Brown and Durbin proposed S  2895 , and Representative Doggett introduced H R  5549 , the Pay What You Owe Before You Go Act, that would have taxed the accumulated deferred earnings of inverting firms  Then Senate Finance Committee Chairman Ron Wyden had proposed having draft legislation in place in September 2014, and also referred to Schumer's earnings-stripping proposal  Senator Wyden had previously announced that any changes would be retroactive to May 8, 2014 

ground_truth: The Energy and Water Development appropriations bill provides funding for civil works projects of the U.S. Army Corps of Engineers (USACE); the Department of the Interior's Bureau of Reclamation (Reclamation) and Central Utah Project (CUP); the Department of Energy (DOE); the Nuclear Regulatory Commission (NRC); and several other independent agencies. DOE typically accounts for about 80% of the bill's funding. President Trump submitted his FY2020 detailed budget proposal to Congress on March 18, 2019 (after submitting a general budget overview on March 11). The budget requests for agencies included in the Energy and Water Development appropriations bill total $38.02 billion—$6.64 billion (15%) below the FY2019 appropriation. The largest exception to the overall decrease proposed for energy and water programs is a $1.309 billion increase (12%) for DOE nuclear weapons activities. For FY2019, the conference agreement on H.R. 5895 (H.Rept. 115-929) provided total Energy and Water Development appropriations of $44.66 billion—3% above the FY2018 level, excluding supplemental funding, and 23% above the FY2019 request. It was signed by the President on September 21, 2018 (P.L. 115-244). Emergency supplemental appropriations totaling $17.419 billion were provided to USACE and DOE for hurricane response by the Bipartisan Budget Act of 2018 (P.L. 115-123), signed February 9, 2018. Major Energy and Water Development funding issues for FY2020 are listed below. They were selected based on the total funding involved, the percentage of proposed increases or decreases, and potential impact on broader public policy considerations. Water Agency Funding Reductions. The Trump Administration requested reductions of 31% for USACE and 29% for Reclamation for FY2020 from the FY2019 enacted levels. The largest reductions would be from USACE Operation and Maintenance (-48%) and Reclamation's Water and Related Resources account (-31%). Similar reductions proposed by the Administration for FY2019 were not enacted. Power Marketing Administration (PMA) Reforms. DOE's FY2020 budget request includes mandatory proposals to sell PMA electricity transmission lines and other assets, repeal certain PMA borrowing authority, and eliminate cost-based limits on the electricity rates charged by the PMAs. The proposals would need to be enacted in authorizing legislation. Termination of Energy Efficiency Grants. DOE's Weatherization Assistance Program and State Energy Program would be terminated under the FY2020 budget request. The Administration had proposed to eliminate the grants in FY2018 and FY2019, but Congress continued funding. Reductions in Energy Research and Development. Under the FY2020 budget request, DOE research and development appropriations would be reduced for energy efficiency and renewable energy (EERE) by 83%, nuclear energy by 38%, and fossil energy by 24%. Similar reductions proposed by the Administration for FY2019 were not enacted. Nuclear Waste Repository. The Administration's budget request would provide new funding for the first time since FY2010 for a proposed nuclear waste repository at Yucca Mountain, NV. DOE would receive $116 million to seek an NRC license for the repository and develop interim waste storage capacity. NRC would receive $38.5 million to consider DOE's repository license application. Similar Administration funding requests for FY2018 and FY2019 were not enacted. Elimination of Advanced Research Projects Agency—Energy (ARPA-E). The Trump Administration proposes no new appropriations for ARPA-E in FY2020 and to cancel $287 million in unobligated balances from previous appropriations. Similar proposals to terminate ARPA-E in FY2018 and FY2019 were not enacted. Loan Programs Termination. The FY2020 budget request would terminate DOE's Title 17 Innovative Technology Loan Guarantee Program, the Advanced Technology Vehicles Manufacturing Loan Program, and the Tribal Energy Loan Guarantee Program. Administration proposals to eliminate the programs were not included in the enacted appropriations measures for FY2018 and FY2019. Weapons Activities. The FY2020 budget request for DOE Weapons Activities is 12% greater than it was in FY2019 ($12.4 billion vs. $11.1 billion), in contrast to a proposed 10% reduction in DOE's total funding. Notable proposed increases would be used for warhead life extension programs and preparations for increase production of plutonium pits (warhead cores).