Net Metering: In Brief

Summary: Net metering is a policy that allows electricity customers with their own generation capacity to be financially compensated for the energy they produce. Net metering is widely regarded as having an important role in deployment of distributed generation (DG), especially solar energy. State and local governments have authority to establish net metering policies, and some have done so for many years. Congress took action to encourage net metering in the Energy Policy Act of 2005 (EPACT05), and the policy now exists, in some form, in 45 states. Recent state net metering policy modifications, and potential effects on solar energy deployment, may be relevant to congressional discussions regarding the role of renewable energy sources in the nation's electricity system.

Summary: Solar photovoltaic panels (e.g., rooftop solar) accounted for 97% of the generation capacity participating in net metering programs in 2018. Net metering participation roughly quadrupled from 2013 to 2018, according to data from the U.S. Energy Information Administration. Hawaii has the highest participation rate of any state, with 15% of electricity customers participating in net metering in 2018. In a majority of states, however, net metering customers account for less than 1% of total electricity customers.

Summary: States differ in the way net metering customers are compensated. A common method is the retail rate, under which energy from net metering capacity offsets energy consumed from the grid in a one-to-one fashion. This method is often described as the "meter running backward." Retail rate compensation was initially adopted, in large part, for its administrative simplicity. Some stakeholders continue to prefer it for the relatively high payments it gives to net metering customers. Other stakeholders criticize retail rate compensation as overcompensating net metering customers for the electricity they produce. Part of this criticism comes from the fact that electricity retail rates reflect not just costs associated with generating electricity, but also costs associated with building, maintaining, and operating the transmission and distribution systems ("the grid"). Electricity rates are typically designed so that utilities can recover their total costs associated with providing electricity. If a sufficiently large number of customers participate in net metering, costs might increase for non-net metering customers in order to pay for the grid benefits. This possibility is known as a cross-subsidy, or sometimes a cost shift. In addition to these concerns about fairness, some critics of retail rate compensation raise concerns about equity, because historically most net metering customers have had above-average incomes. Empirical evidence of the cost increases for non-net metering customers is mixed, partly because studies make different assumptions about costs and benefits associated with DG. Some projections in different states have quantified a potential cross-subsidy, but projections in other states have concluded that the value of cross-subsidies are approximately zero.

Summary: States have considered, and in some cases adopted, alternative compensation approaches to address concerns over cross-subsidies. One type of approach adds a fixed charge to net metering customers' bills to reflect the costs of maintaining the grid. Another type of approach provides an alternative compensation rate (i.e., not the retail rate) that net metering customers receive for the energy they deliver to the grid. Options for alternative compensation rates are avoided cost rates, which reflect primarily the utility's cost of producing electricity, and value of solar (VOS) rates, which additionally consider societal benefits such as reduced air emissions. Generally, rates that consider more benefits (and avoided costs) associated with DG have a higher monetary value and might promote greater levels of DG penetration. States have included different costs and benefits in analyses conducted to estimate alternative compensation rates, resulting in different monetary values for alternative rates. Even if states opted to include the same types of costs and benefits, they might derive different values for rates, since the relative costs and benefits of DG can vary based on local circumstances. Relevant local circumstances include overall penetration of DG, average and marginal electricity costs, congestion in transmission and distribution systems, and potentially other factors.

Summary: Other state net metering policy provisions can affect deployment of DG. They relate to whether to adopt program caps, thereby limiting the number of participants; which technology type and what size generator are eligible; how long customers can "carry over" credits associated with surplus electricity generation; and what types of system ownership arrangements may participate in net metering. A related consideration is whether third parties, such as solar leasing firms, may develop DG in the state.

Summary: Some Members of Congress have expressed interest in various aspects of net metering policy since passage of EPACT05. Legislation has sought to limit revisions that states can make to net metering policies; expand access to net metering for different types of electricity generation; and estimate costs and benefits associated with net metering, among other topics.

For roughly the first 100 years of the electric power industry, electricity generation occurred mostly in large, c entralized power plants. Partly in response to the energy crisis of the 1970s, Congress established policies to promote, among other things, alternatives to centralized power plants, including generation capacity located on customer property. Customer-sited generation is a type of distributed generation (DG) and can be located on commercial, industrial, or residential properties.

One policy intended to promote DG is net metering. In the Energy Policy Act of 2005 (EPACT05; P.L. 109-58 ) Congress encouraged states to adopt net metering, defined in the law as

service to an electric consumer under which electric energy generated by that electric consumer from an eligible on-site generating facility and delivered to the local distribution facilities may be used to offset electric energy provided by the electric utility to the electric consumer during the applicable billing period.

State net metering policies may be relevant to congressional discussions about the role of renewable energy sources, like solar, in the nation's electricity system. Solar photovoltaic (PV) is the most commonly deployed energy type participating in net metering, comprising 97% of net metering capacity in 2018. Other federal and state policies (e.g., tax incentives, renewable portfolio standards, carbon pricing) may interact with net metering policies to determine the deployment pace of distributed solar energy sources and other types of DG.

Also, some Members of Congress may be interested in how some states have modified their net metering policies in recent years, including the effect of those modifications on stakeholders. Some recent state policy changes are expected to expand solar energy development, while others are expected to slow it. Among other options, Congress could choose to restrict, encourage, or require certain kinds of state policy modifications, or take no action on state net metering policies, depending on congressional priorities. This report provides background information and discusses current issues related to net metering policy.

Net metering policies determine how electricity customers with distributed generation are compensated for electricity they deliver to the grid.

Net metering is frequently used to mean a policy of net energy metering (NEM), which specifies that electricity delivered to the grid from a net metering customer is compensated on a one-to-one basis for electricity purchased from the grid. Every unit of electricity generated by the customer (typically expressed in kilowatt-hours, kWh) is subtracted from the amount of electricity they consume, for billing purposes. This is frequently described as "the meter running backward."

Other analyses and discussions sometimes distinguish different policy options, including:

buy-all, sell-all , under which a utility buys all electricity generated by the net metering customer at one (usually, lower) rate and sells all the electricity consumed by the customer at a different rate (usually the same retail rate charged to any other customer); and net billing , under which electricity delivered to the grid is compensated at a pre-determined value, which might be measured as a rate or a fixed amount.

This report will generally use the term net metering to refer to any of these policies since they are closely related to each other, in that they provide financial support for DG.

As of April 2019, 45 states had net metering policies in place that require utilities to offer net metering to customers. Some of these policies include alternatives to net energy metering. Further, some of these policies predate EPACT05. In the states that do not require utilities to offer net metering, some utilities voluntarily offer net metering service to customers.

According to the U.S. Energy Information Administration (EIA), almost 2 million customers participated in net metering programs in the United States in 2018, compared to over 153 million electricity customers overall. In other words, about 1% of U.S. electricity customers in 2018 participated in net metering. The number of net metering customers increased from 2013 to 2018 as shown in Figure 1 . Data before 2013 also show growth in net metering participation, but EIA changed the way it reported net metering data beginning in 2013, so these data are not shown below, in the interest of consistency.

Net metering participation can be measured in other ways, such as total net metering capacity or the amount of electricity delivered to the grid from net metering generators. According to the EIA data, these measures have seen average annual increases similar to customer count.

Levels of net metering participation vary by state, as shown in Figure 2 . In many states, less than 0.1% of electricity customers participate in net metering. Hawaii has the highest participation rate, with over 15% of customers participating in the state's net metering programs. Some potentially relevant factors for the differences among states include design of state net metering policies, presence of other state policies such as renewable portfolio standards (which may incentivize renewable DG), average electricity prices, and solar resource quality. A full analysis of the factors behind different state participation rates is beyond the scope of this report.

This section provides an overview of how electricity rates are set in general, in order to clarify major areas of debate for state net metering policies.

Electricity ratemaking is the process of allocating to customers the total costs that utilities incur when producing and delivering electricity. Many complexities and local factors influence ratemaking. A full discussion is beyond the scope of this report. As an illustrative example, this section discusses typical ratemaking considerations for vertically-integrated investor-owned utilities. In its service territory, this type of utility owns and operates all parts of the electricity system, from electricity generation to transmission and distribution to customers. State regulators conduct the ratemaking process and approve rates that the utility can charge its customers. Regulators design rates so that utilities can recover their costs through customers' bill payments. These costs generally include:

the costs of building and operating power plants, including fuel costs and compliance with any applicable regulations (e.g., environmental, safety, reliability); the costs of building and maintaining transmission and distribution systems (i.e., the grid); regular utility operating costs, such as ensuring reliable grid operation (i.e., grid services) or collecting meter data for billing; any programmatic costs, such as bill relief for low-income consumers or implementation of other public policies; and a return on the utility investments (i.e., return on equity or ROE).

A common method for setting rates is to establish volumetric rates (sometimes called flat rates). All customers within a given type, or customer class, will pay the same rate expressed in cents per kilowatt-hour (cents/kWh). The more electricity a customer uses, the higher a bill they will have. Customers' bills will vary each month based on the amount of electricity they consume. Regulators estimate a value for the volumetric rate that will allow the utility to recover its total costs, based on projections of total sales for all customer classes. In this way, the costs for electricity generation, transmission, distribution, and other utility expenses are shared among all customers.

Costs associated with customer service (e.g., billing, connections) sometimes are separated from the electricity rate and recovered in a separate customer charge. This charge would appear as a fixed value on the customer's bill and would not change from month to month. Customer charges are additional to rates. In other words, a customer's bill would have volumetric charges (rate times kWh consumed) plus a fixed customer charge.

Some customer classes, such as large industrial facilities or institutions, consume so much electricity that utilities might make special system modifications for them. In some cases, utilities recover these costs in a demand charge that is only paid by those high-consuming customers. Like customer charges, demand charges are generally additional to volumetric charges and do not typically change from month to month.

EPACT05 encouraged states to adopt net metering, but the law did not specify how customers should be compensated. States with net metering have taken different approaches in implementing their policies, and many states have revised their compensation approaches in recent years. These decisions may affect DG markets. As one study from the National Renewable Energy Laboratory observed, "compensation mechanisms impact DG deployment because they strongly influence the value proposition of a DG investment for individual customers."

This section describes some elements of states' approaches to implementing net metering.

A common approach to net metering is to compensate net metering customers at the utility's approved retail rate of electricity. This is frequently described as a net energy metering (NEM) policy, or simply net metering.

A 2019 review of state net metering policy revisions describes how state policymakers initially viewed the retail rate as a "close-enough proxy" for rate setting, as follows:

Initially, NEM was largely understood to be an administratively simple, rough-justice approach that was acceptable at a time when markets for solar PV and other DG were uneconomic. In many of the initial decisions about NEM, policy makers assumed that the retail rate was a close-enough proxy for the value of solar or value of DG, and the total numbers of participating customers and kilowatt hours being credited at the retail price were relatively small ... the small number of participating customers multiplied by the small quantity of energy each would deliver to the grid, meant that any error associated with under- or over-estimating the true value would be small.

Retail rates provide relatively high compensation for net metering generation (see Figure 3 ). As described above (under "Overview of Electricity Ratemaking"), this is because the retail rate for any electric utility customer reflects the total costs the utility incurs for delivering electricity, including generating electricity and maintaining the grid. Retail rates may encourage net metering participation to a greater extent than other compensation approaches because customers can recover the upfront costs of a DG system more quickly.

Some stakeholders have noted the possibility that compensating net metering customers at the retail rate may result in increased costs for non-net metering customers. This possibility, known as a cost shift or cross-subsidy, arises from the fact that the ratemaking process allocates total utility costs among all customers. Net metering customers generate electricity for their own consumption, which reduces the amount of utility-provided electricity they need (and, consequentially, the utility's costs to produce electricity). However, self-generation does not necessarily reduce the amount of other utility-provided services a customer uses (or, generally, the utility's costs to provide those services, such as maintaining the grid). For example, solar net metering customers might consume electricity from the grid at night and derive reliability benefits from the grid even when the sun is shining. Over time, rates for non-net metering customers could increase so the utility could recover the costs of maintaining the grid that are not recovered from net metering customers. Some stakeholders also have noted that residential net metering customers have tended to have higher incomes than non-net metering customers, raising potential equity concerns over cross-subsidies.

Studies disagree on the extent to which non-net metering customers may be cross-subsidizing net metering customers. Studies have used different methodologies in estimating cross-subsidies, including which costs and benefits are included and over what timeframe the costs and benefits are considered. These methodological differences may help explain the lack of a consensus view on the magnitude of cross-subsidies. Also, any observed cross-subsidies may be affected by local factors, such as DG penetration and electricity demand growth, which may change over time. As a result, an estimate conducted in one state in one year cannot necessarily be extrapolated to all states in all future years. One synthesis of estimates conducted in or around 2015 found that net metering cost shifts range from $444 to $1,752 per net metering customer per year.

Observers may disagree on how much of a cross-subsidy is large enough to warrant policy action. Net metering, and any associated cross-subsidies, is only one factor affecting electricity rates. A 2017 study assessed the potential rate effects of a variety of factors, including net metering, energy efficiency, natural gas prices, state renewable portfolio standards, the federal Clean Power Plan (which was never implemented), and utility capital expenditures. That study found that the rate effects of DG would likely be increases between 0.03 cents/kWh and 0.2 cents/kWh, compared to increases up to 3.6 cents/kWh caused by other factors.

The possible presence of a cost shift does not necessarily mean that non-net metering customers are transferring money to net metering customers. The extent to which this might occur would depend, among other things, on net metering participation rates and ratemaking decisions made by regulators. There could be a delay in addressing cost shifts through normal ratemaking processes because those processes have inherent time lags. Further, cost shifts are not unique to DG. As noted in a guide for state regulators, "cost shifting, or subsidies, is unavoidable in practical rate design but regulators endeavor to mitigate these effects in the larger context of the many, often conflicting, rate design principles."

Some states are seeking to move from the "close-enough proxy" of the retail rate to more precise allocations of system costs and benefits to net metering customers. Often state policy debates focus on addressing concerns about potential cross-subsidies from retail rate compensation. Conceptually, states are exploring two options: adding fixed charges (e.g., customer charge, demand charge) to net metering customers' bills or changing the compensation rate. In practice, states are considering variations of these options, and some states have implemented one of these options or both at the same time.

Adding fixed charges to net metering customers' bills is meant to allow utilities to recover costs for grid maintenance and operation. At the same time, this approach might preserve some perceived advantages for compensating net metering customers at the retail rate (e.g., administrative simplicity, ease of understanding). Proponents of this approach typically include utilities and some advocates for low-income customers. They often assert that adding fixed charges (or other revisions like alternative compensation rates) reduces cost shifting and increases fairness. Opponents typically include the solar industry and environmental advocates. They often contend that net metering promotes competition in the electricity industry and that fixed charges (or other revisions that would discourage DG) ignore societal benefits that DG (especially solar energy) can provide. In addition, while the concept of adding fixed charges may be straightforward, determining a value for fixed charges that accurately reflects net metering customers' use of the grid has been complex and controversial in practice.

Some states have adopted an alternative compensation rate that attempts to represent the energy costs the utility avoids when net metering customers supply some of their own energy (see Figure 3 ). This approach, referred to in this report as an avoided cost rate, is sometimes called an energy rate, a wholesale rate, a supply rate, or variations of these terms. While the retail rate reflects all costs associated with producing energy, operating and maintaining the grid, and other utility expenses, an avoided cost rate primarily reflects costs associated with producing energy. Some states also might consider network upgrades required to reliably integrate DG, especially solar PV. Depending on circumstances, the avoided cost rate might be estimated by a regulator using an independent methodology or by referral to wholesale electricity markets. Avoided cost rates are usually lower than retail rates.

Another alternative compensation rate applies to net metering customers with installed solar PV. Under this method, net metering customers are compensated according to a value of solar (VOS) rate. As illustrated in Figure 3 , this approach reflects many of the same considerations as an avoided cost rate and, additionally, reflects estimated societal benefits associated with distributed solar PV (e.g., reduced air emissions). Solar advocates generally favor inclusion of societal benefits in all aspects of net metering policy and rate design. Some states (and stakeholders) may consider reduced greenhouse gas emissions a benefit of distributed solar PV as well. VOS is often calculated to be larger than avoided cost rates but smaller than retail rates, though states could potentially determine a VOS rate greater than the retail rate, depending on the perceived benefits of solar included in the analysis. A related compensation rate applies to any distributed energy resource (DER), not just distributed solar generation, and reflects estimated grid and societal benefits of DERs. New York is one state taking this approach.

Regardless of which rate is set (i.e., avoided cost or VOS) and how it is calculated, it could be applied in either a buy-all, sell-all net metering arrangement or a net billing arrangement (see definitions in the section " What Is Net Metering? ").

Points of debate about alternative compensation approaches have included which costs and benefits to consider, and how to quantify them. One challenge around quantification is that costs and benefits of DG can be time- and location-specific. Another challenge is that costs and benefits might change as the level of DG penetration changes. States vary in their approach to evaluating net metering, as evidenced by a 2018 analysis conducted for the U.S. Department of Energy (DOE). That analysis, which reviewed 15 state studies of net metering costs and benefits released between 2014 and 2017, noted that states used various assumptions, and that "the set of value categories included, and whether these categories represent costs or benefits, have a significant impact on the overall results of a given study."

Other State Net Metering Policy Provisions

In addition to differing in net metering compensation, state net metering policies differ in a variety of other aspects. Some differences pertain to provisions on program caps, source eligibility, credit retention, and system ownership. Provisions in these areas can affect deployment of DG.

Program caps, sometimes called aggregate capacity limits, set limits on the number of customers or amount of generation capacity that may participate. Program caps can be expressed in units of power (e.g., megawatts; MW), a percentage of electricity demand over some period of time, or other measures as determined by a state. The choice of whether to have program caps and, if so, how to define them can affect the amount of DG that a state's net metering policy might promote. Program caps may be established to reduce risks to the electricity system, such as potential reliability risks from DG, or reduce the likelihood that cross-subsidies would occur. Caps also might reduce the potential for sales losses or other negative financial impacts for utilities. On the other hand, program caps might create a barrier to achieving other policy goals, for example the renewable energy goals that some states have.

States specify which generation sources can participate in net metering, often based on capacity limits (i.e., generator size) and technology type. Solar energy is the dominant energy source for net metering capacity, but some states allow other energy types to participate as well. Whether a non-solar project will participate is usually due to cost factors, but other factors such as customer type (e.g., residential, commercial, or industrial) and location (e.g., urban, rural) may be influential as well. For example, combined heat and power facilities might be attractive mostly to large commercial and industrial customers that use steam. Distributed wind projects might be attractive mostly to farms or other customers with relatively large acreage.

Net metering customers often have periods when their electricity consumption exceeds their generation and periods when the opposite is true. When net metering generation exceeds consumption, net metering customers can deliver this surplus generation to the grid. Many state net metering policies compensate net metering customers in some way for the total amount of electricity they generate, but some states only compensate the surplus generation (i.e., the amount delivered to the grid). Typically, if a net metering customer has a surplus over an entire billing period, the customer receives a credit on the next bill. States have different provisions for how long credits can carry over. Credit retention policies can determine the extent to which customers might reduce their total electricity costs to $0.

Many net metering customers have a single generator located behind a single electricity meter. A single-family home with a rooftop solar installation is one example. Other arrangements are possible though, and some states allow these. Aggregate net metering applies to single customers with multiple electricity meters on their property, for example farms, municipalities, or school districts. Shared net metering applies to multiple customers associated with the same net metering generation capacity, for example participants in community solar projects (sometimes called solar gardens). A version of shared net metering called virtual net metering applies when the shared project is located onsite, for example multi-family dwellings.

A related policy is whether third party participation is allowed. In third party participation arrangements, such as solar leasing and power purchase agreements, the solar system is owned by an entity other than the electricity consumer on whose property the system is installed.

Some Members of Congress have introduced legislation addressing aspects of states' net metering policies. Some proposals would influence state policies directly. For example, S.Amdt. 3120 in the 114 th Congress would have limited the ability of state regulators to move net metering customers to lower compensation rates or to add fixed charges to their bills. S.Amdt. 3053 , also in the 114 th Congress, would have required state regulators to consider the extent to which their net metering policies created cross-subsidies. H.R. 4175 in the 116 th Congress would require states to consider adopting net billing policies for community solar.

Other legislation would require studies to better understand the costs and benefits of net metering. For example, in a committee report on an FY2017 appropriations bill, Congress requested a DOE study on "the costs and benefits of net-metering and distributed solar generation to the electrical grid, utilities and ratepayers." DOE transmitted the report to Congress in 2019. In the 116 th Congress, S. 346 and H.R. 1009 would require the National Academies of Sciences, Engineering, and Medicine to study various aspects of net metering such as alternative incentives for DG, net metering planning and operating techniques, and consumer and industry incentives for net metering.


International Food Assistance: FY2020 Appropriations

Summary: U.S. international food assistance programs provide food, or the means to purchase food, to people around the world at risk of hunger. Congress funds these programs through two appropriations bills: the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Actâalso known as the Agriculture appropriations billâand the Department of State, Foreign Operations, and Related Programs (SFOPS) Appropriations Act. The Agriculture appropriations bill funds the U.S. Department of Agriculture (USDA) except for the Forest Service. The SFOPS appropriations bill funds the U.S. Department of State, U.S. Agency for International Development (USAID), and other non-defense foreign policy agencies. Both bills provide funding for U.S. international food assistance programs. Appropriations for agricultural development programs, such as Feed the Future or international agricultural exchange programs, are not considered part of food assistance spending.

Summary: For FY2020, the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ), provided an estimated $4.091 billion in funding for U.S. international food assistance programs. This was an 11% decrease from the $4.581 billion provided in FY2019. Division B of the act provided $1.945 billion in agriculture appropriations for international food assistance programs, including $1.725 billion for the Food for Peace (FFP) Title II program and $220 million for the McGovern-Dole International Food for Education and Child Nutrition Program. Division G of the act provided an estimated $2.146 billion for international food assistance in SFOPS appropriations. This included $80 million in the Community Development Fund and an estimated $2.066 billion for the Emergency Food Security Program (EFSP). Congress funds EFSP within the International Disaster Assistance (IDA) account but does not designate a specific amount for the program. USAID allocates IDA funds to EFSP and other non-food humanitarian response programs. The estimated FY2020 EFSP appropriation is a CRS calculation based on a five-year average of the percentage of IDA funds allocated to EFSP.

Summary: In its FY2020 budget request, the Trump Administration proposed to eliminate the FFP Title II, McGovern-Dole, and Food for Progress programs, which Congress funds within Agriculture appropriations. The Administration proposed to consolidate multiple accounts, including accounts within Agriculture and SFOPS appropriations that fund international food assistance and other humanitarian assistance, into a new International Humanitarian Assistance account. Congress did not adopt these proposals.

Summary: In addition to funding U.S. international food assistance programs, the FY2020 Agriculture appropriations bill included policy-related provisions that directed the executive branch how to carry out certain appropriations. The Explanatory Statement accompanying P.L. 116-94 , as well as committee reports accompanying the House and Senate Agriculture and SFOPS appropriations bills, also included policy provisions related to international food assistance. For example, one provision directed that a certain amount of the funds appropriated for the McGovern-Dole Program be used for local and regional procure ment âfood assistance purchased in the country or region where it is to be distributed rather than purchased in the United States.

The U.S. government administers multiple international food assistance programs that aim to alleviate hunger and improve food security in other countries. Some of these programs provide emergency assistance to people affected by conflict or natural disaster. Other programs provide nonemergency assistance to address chronic poverty and hunger, such as by providing food to people during a seasonal food shortage or training communities on issues related to nutrition.

U.S. international food assistance programs originated in 1954 with the Food for Peace Act (P.L. 83-480), also referred to as P.L. 480 . Historically, the United States has provided international food assistance primarily through in-kind aid , whereby U.S. commodities are shipped to countries in need. Congress typically funds in-kind food aid programs through the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Actâknown as the Agriculture appropriations bill. The Agriculture appropriations bill funds the U.S. Department of Agriculture (USDA) except for the Forest Service.

In 2010, the U.S. Agency for International Development (USAID) began providing market-based assistance to supplement in-kind aid in emergency and nonemergency situations. Market-based assistance provides cash transfers, vouchers, or local and regional procurement (LRP)âfood purchased in the country or region where it is to be distributed rather than purchased in the United States. Congress funds most market-based assistance through the Department of State, Foreign Operations, and Related Programs (SFOPS) appropriations bill. The SFOPS appropriations bill funds the U.S. Department of State, USAID, and other non-defense foreign policy agencies.

For FY2020, the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provided approximately $4.091 billion for U.S. international food assistance programs. This was an 11% decrease from the $4.581 billion provided in FY2019. Division B of P.L. 116-94 provided $1.945 billion for international food assistance programs in Agriculture appropriations, including $1.725 billion for the Food for Peace (FFP) Title II program and $220 million for the McGovern-Dole International Food for Education and Child Nutrition Program. Division G of P.L. 116-94 provided an estimated $2.146 billion for international food assistance programs in SFOPS appropriations. This included an estimated $2.066 billion for the Emergency Food Security Program (EFSP) and $80 million for the Community Development Fund (CDF).

This report provides an overview of accounts in the Agriculture and SFOPS appropriations bills that fund international food assistance programs. It summarizes the Trump Administration's FY2020 budget request for international food assistance. The report then details the international food assistance provisions in the FY2020 enacted Agriculture and SFOPS appropriations billsâDivision B and Division G of P.L. 116-94 , respectively.

Congress funds most U.S. international food assistance programs through two annual appropriations billsâthe Agriculture appropriations bill and the SFOPS appropriations bill. The following sections detail each account in the Agriculture and SFOPS appropriations bills that funds international food assistance and the programs funded through these accounts. Table 1 lists each international food assistance account along with the respective appropriations bill, funded programs, primary delivery method, and implementing agency. Figure 1 depicts each U.S. international food assistance program by authorizing and appropriations committee jurisdiction and implementing agency.

Agriculture-Funded International Food Assistance Accounts

Some international food assistance programs under the jurisdiction of the Agriculture appropriations committees receive discretionary funding, while other programs receive mandatory funding. Congress authorizes discretionary funding levels in authorizing legislation. A program's receipt of any of the authorized funding then awaits congressional discretion in annual appropriations. With mandatory funding, Congress authorizes and provides funding in authorizing legislation. Thus, programs with mandatory funding do not require a separate appropriation.

The Food for Peace Act (P.L. 83-480) is the primary authorizing legislation for international food assistance programs funded through agriculture appropriations. Congress reauthorizes discretionary and mandatory funding levels for these programs in periodic farm bills, most recently the Agriculture Improvement Act of 2018 (2018 farm bill; P.L. 115-334 ). Congress provides discretionary funding for international food assistance programs through three accounts in the Foreign Assistance and Related Programs title of the Agriculture appropriations bill: the Food for Peace Title I Direct Credit and Food for Progress Program account, the Food for Peace Title II Grants account, and the McGovern-Dole International Food for Education and Child Nutrition Program Grants account. Congress has periodically provided additional discretionary funding for international food assistance in the General Provisions title of the Agriculture appropriations bill.

Food for Peace Title I Direct Credit and Food for Progress Program Account

The Food for Peace (FFP) Title I Direct Credit and Food for Progress Program account provides administrative expenses for the FFP Title I and Food for Progress programs. FFP Title I provides concessional sales âsales on credit terms below market rates (loans)âof U.S. commodities to governments of developing countries and private entities. USDA administers FFP Title I. Congress has not appropriated funds for new FFP Title I sales since FY2006 but continues to appropriate funds to administer the FFP Title I loans provided before FY2006.

Food for Progress donates U.S. agricultural commodities to governments or organizations to be monetized âsold on local markets in recipient countries to generate proceeds for economic development projects. Congress has authorized Food for Progress to receive both mandatory and discretionary funding. This account receives annual appropriations to cover administrative expenses. Congress primarily funds programmatic activities through mandatory funding.

The Food for Peace Title II Grants account funds the FFP Title II program. FFP Title II donates U.S. agricultural commodities to recipients in foreign countries. FFP Title II provides both emergency and nonemergency aid. Typically, the majority of FFP Title II funds support emergency aid. USAID administers FFP Title II. Congress appropriates FFP Title II funds to USDA, which then transfers the funds to USAID. Since the mid-1980s, FFP Title II has received the majority of funds appropriated to international food assistance in the Agriculture appropriations bill. FFP Title II also receives some funding for nonemergency assistance from the Community Development Fund in the SFOPS appropriations bill (see " SFOPS-Funded International Food Assistance Accounts ").

McGovern-Dole International Food for Education and Child Nutrition Program Grants Account

This account funds the McGovern-Dole International Food for Education and Child Nutrition Program. McGovern-Dole donates U.S. agricultural commodities to school feeding programs and pregnant or nursing mothers in qualifying countries. USDA administers McGovern-Dole. Since FY2016, Congress has set aside a portion of McGovern-Dole funds for LRP. The 2018 farm bill authorized USDA to use up to 10% of annual McGovern-Dole funds for LRP.

Congress funds the Farmer-to-Farmer Program, also known as FFP Title V, through a set-aside of the total appropriation for Food for Peace Act programs. This program finances short-term placements for U.S. volunteers to provide technical assistance to farmers in developing countries. USAID administers the Farmer-to-Farmer Program. Statute sets minimum program funding as the greater of $10 million or 0.5% of annual funds for Food for Peace Act programs and maximum program funding as the greater of $15 million or 0.6% of annual funds for Food for Peace Act programs.

Congress has authorized certain U.S. international food aid programs to receive mandatory funding. Food for Progress relies primarily on mandatory funding financed through USDA's Commodity Credit Corporation (CCC). Food for Progress does not typically receive discretionary funding beyond funding for administrative expenses provided by the FFP Title I account. However, in FY2019, Congress provided discretionary funding for Food for Progress in the General Provisions title of the Agriculture Appropriations Act.

The Bill Emerson Humanitarian Trust (BEHT) is a reserve of funds held by the CCC. USDA can use BEHT funds to supplement FFP Title II activities, especially when FFP Title II funds alone cannot meet emergency international food needs. If USDA provides aid through BEHT, Congress may appropriate funds to the CCC in a subsequent fiscal year to reimburse the CCC for the value of the released funds. USDA did not release funds from BEHT in FY2019, and Congress did not appropriate any BEHT reimbursement funds to the CCC in FY2020.

Congress funds international food assistance programs through two funding accounts in the SFOPS appropriation using discretionary funds.

The International Disaster Assistance (IDA) funding account provides for EFSP, which USAID first employed in FY2010 to supplement its emergency FFP Title II in-kind aid. Congress permanently authorized the program in the Global Food Security Act of 2016 ( P.L. 114-195 ). Congress does not specify the exact funding level for EFSP in its annual appropriation; rather, USAID determines the allocation of IDA funds in response to humanitarian need in any given year. Between FY2015 and FY2019, EFSP represented an average of 47% of the whole IDA appropriation.

Congress designates funding within the Development Assistance (DA) account for CDF. CDF funds complement FFP Title II nonemergency programs. USAID first used CDF in FY2010 to reduce its reliance on monetization âthe practice of implementing partners selling U.S. commodities on local markets and using the proceeds to fund programs. As with EFSP, CDF offers USAID the flexibility to pursue market-based interventions including cash transfers, food vouchers, and LRP. Today, CDF continues to complement FFP Title II nonemergency programming but is no longer needed to offset monetization, as the practice is no longer a legislative requirement.

Congress designates the level of CDF in its reports accompanying annual appropriations (often referred to as a "soft earmark"). For more information on CDF, see CRS Report R45879, International Food Assistance: Food for Peace Nonemergency Programs , by Emily M. Morgenstern.

The Administration's FY2020 Budget Request

For the third year in a row, the Trump Administration's FY2020 budget request proposed eliminating McGovern-Dole and FFP Title II. However, unlike in the FY2018 and FY2019 requestsâin which the President proposed shifting all funding for international food assistance to the IDA account within the SFOPS appropriations billâthe President's FY2020 request proposed creating a new International Humanitarian Assistance (IHA) account. The proposed IHA account would have consolidated four humanitarian assistance accountsâthe IDA, Migration and Refugee Assistance, and Emergency Refugee and Migration Assistance accounts that are funded in SFOPS appropriations, along with FFP Title II within Agriculture appropriationsâinto a single account within the SFOPS appropriations bill. The FY2020 budget request also repeated past proposals to eliminate Food for Progress and merge the DA account with the Economic Support Fund (ESF), Democracy Fund (DF), and Assistance for Europe, Eurasia, and Central Asia (AEECA) accounts to create a new Economic Support and Development Fund (ESDF) within SFOPS appropriations.

Congress did not adopt the Administration's FY2020 proposals to eliminate FFP Title II, McGovern-Dole, or Food for Progress or create the new combined IHA and ESDF accounts. The following section summarizes the Administration's FY2020 budget requests for U.S. international food assistance programs in the Agriculture and SFOPS appropriations bills.

For FY2020, the Trump Administration requested discretionary funding for one international food assistance program account. The Administration requested $135,000 for the FFP Title I account to carry out existing FFP Title I loans and Food for Progress projects. This amount would have been $14,000 less than the FY2019 enacted amount for the FFP Title I account. The Administration's FY2020 budget request stated that the workload to administer FFP Title I was "significantly less than previously estimated" and that "funds were redirected to meet higher priorities."

The FY2020 request also repeated the FY2018 and FY2019 proposals to eliminate FFP Title II, and McGovern-Dole and the FY2019 proposal to eliminate Food for Progress. Regarding FFP Title II, the Administration stated "To replace the inefficient food aid provided through Title II, the 2020 request includes funding for emergency food needs within the new, more efficient International Humanitarian Assistance (IHA) account." Eliminating FFP Title II would fund all emergency food assistance through the SFOPS appropriations rather than jointly between the SFOPS and Agriculture appropriations bills.

Regarding the proposed elimination of McGovern-Dole, the Administration's FY2020 request stated, "In kind food aid is associated with high transportation and other costs and is inefficient compared to other types of development assistance. In addition, the McGovern Dole program has unaddressed oversight and performance monitoring challenges."

Food for Progress primarily receives mandatory funding. The FY2020 request proposes to eliminate mandatory funding authority, estimating that this would result in $1.7 billion in savings over 10 years.

The FY2020 SFOPS budget proposal included a combined IHA account that would have consolidated the four humanitarian assistance accounts. According to budget documents, the IHA account would have supported "all aspects of humanitarian assistance, including shelter, protection, emergency health and nutrition, the provision of safe drinking water, livelihoods supports, emergency food interventions, rehabilitation, disaster risk reduction, and transition to development assistance programs," among other activities. The account would have been managed by the newly consolidated Humanitarian Assistance Bureau at USAID but with a "senior dual-hat leader" under the policy authority of the Secretary of State reporting to both the Secretary of State and the USAID administrator. The Administration proposed $5.97 billion for the IHA account, a 37% decrease from the combined FY2019 appropriations for IDA, FFP Title II, Migration and Refugee Assistance, and Emergency Refugee and Migration Assistance.

The FY2020 SFOPS budget proposal also included a combined ESDF account that would have merged the DA, ESF, DF, and AEECA accounts. The FY2020 proposal included $5.23 billion for ESDF, a 32% decrease from the FY2019 appropriations for the four accounts combined.

Potential Implications of the FY2020 Funding Request

Moving funding from FFP Title II to a new IHA could have changed how the United States delivers food assistance to recipient countries. Statute requires that nearly all assistance distributed under FFP Title II be in-kind aid. By contrast, EFSP, which Congress currently funds through the IDA account but which the Administration proposed to fund through the new IHA, does not have a statutory requirement to provide a portion of assistance as in-kind aid. EFSP can provide in-kind aid or market-based assistance. Therefore, under current statutes, shifting international food assistance funding from FFP Title II to IHA would have meant this funding would not have needed to adhere to the FFP Title II requirement to provide in-kind aid. This could have increased the portion of food assistance provided as market-based assistance rather than in-kind aid and would have shifted implementation from USDA to USAID.

Proposals to shift U.S. international food assistance funding from in-kind food aid to market-based food assistance are not new. Both the Obama and George W. Bush Administrations proposed increasing the portion of U.S. international food assistance delivered as market-based assistance. Some proponents of increasing the use of market-based assistance argue that it could improve program efficiency. However, some interested parties assert that the Trump Administration's proposed decrease in overall funding for international food assistance could offset potential efficiency gains, resulting in fewer people receiving assistance. Some opponents of increasing the share of food assistance that is market-based rather than in-kind maintain that in-kind aid ensures that the United States provides high-quality food to recipients. Certain stakeholders, such as some agricultural commodity groups, may also oppose such changes due to their implications for U.S. government purchase of U.S. commodities.

In addition to the implications above, there are a number of international food assistance issues in which Members of Congress have expressed interest. These include the share of in-kind and market-based food assistance, cargo preference requirements, and congressional jurisdiction, among others. For more information on the broad range of international food assistance-related issues, see CRS Report R45422, U.S. International Food Assistance: An Overview , by Alyssa R. Casey.

The FY2020 Agriculture Appropriations Act provided funding for U.S. international food assistance programs in the Foreign Assistance and Related Programs title (Title V). This included funding for FFP Title II and McGovern-Dole. The act also provided funding for administrative expenses to manage existing FFP Title I loans that originated while the FFP Title I program was active. Unlike in FY2019, Congress did not provide discretionary funding in FY2020 for the Food for Progress program.

The FY2020 SFOPS Appropriations Act provided funding for international food assistance programs in Bilateral Assistance (Title III). Figure 2 shows funding trends for international food assistance programs for FY2015-FY2020. Table 2 details appropriations for international food assistance programs for FY2018-FY2020, including proposed funding levels in the FY2020 Administration's request and House and Senate Agriculture and SFOPS appropriations bills.

The Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 , Div. B) provided $1.945 billion for international food assistance programs, roughly level with the FY2019 enacted amount of $1.942 billion. The FY2020 enacted amount was less than the $2.085 billion in the House-passed Agriculture appropriations bill ( H.R. 3055 ) but more than the $1.926 billion in the Senate-passed bill ( H.R. 3055 ). Congress did not adopt the Administration's FY2020 proposal to eliminate FFP Title II, McGovern-Dole, and Food for Progress.

The FY2020 act provided $1.725 billion for FFP Title II, a 0.5% increase from the $1.716 billion provided in FY2019. In FY2020, Congress provided all FFP Title II funding in the Foreign Assistance and Related Programs title (Title V) of the Agriculture appropriations bill. This was a change from FY2019, when Congress provided the majority of FFP Title II funding ($1.5 billion) in the Foreign Assistance title but provided additional funding for FFP Title II ($216 million) in the bill's General Provisions title (Title VII).

The FY2020 act provided $220 million for McGovern-Dole, a 5% increase from the FY2019 enacted amount of $210. Congress directed a minimum of $20 million of McGovern-Dole funding and a maximum of 10% of total program funding ($22 million) be set aside for LRP. This was an increase from the $15 million set-aside in FY2019. The FY2020 act also provided $142,000 for FFP Title I and Food for Progress administrative expenses, equal to the FY2019 enacted amount.

Unlike in FY2019, the FY2020 act did not provide discretionary appropriations for Food for Progress. Congress typically funds this program through mandatory funding. The 2018 farm bill ( P.L. 115-334 , Â§3302) authorized new pilot agreements within the Food for Progress program to directly fund economic development projects rather than funding the projects through monetizing commodities. The 2018 farm bill authorized $10 million per year for FY2019-FY2023 for pilot agreements, subject to annual appropriations. Congress did not appropriate funding for Food for Progress pilot agreements in FY2019 or FY2020.

Division G of the Further Consolidated Appropriations Act, 2020 ( P.L. 116-94 ) provided funds for international food assistance programs appropriated under the SFOPS measure. The enacted IDA appropriation level grew by 0.2%, from $4.385 billion in FY2019 to $4.395 billion in FY2020. As in prior fiscal years, the measure did not determine a specific level for EFSP. IDA funds are designated to "carry out the provisions of section 491 of the Foreign Assistance Act of 1961 for international disaster relief, rehabilitation, and reconstruction assistance." Because the account is meant to respond to international emergencies, Congress tends to appropriate funds in a lump sum instead of directing funds toward specific countries or crises.

As in previous fiscal years, the final FY2020 act included $80 million for CDF under DA.

In addition to providing funding, the Agriculture and SFOPS appropriations bills may contain policy-related provisions that direct the executive branch how to spend certain funds. Provisions included in appropriations act text have the force of law but generally only for the duration of the fiscal year for which the act provides appropriations. Policy-related provisions generally do not amend the U.S. Code . Table 3 compares select policy-related provisions pertaining to U.S. international food aid programs from the Foreign Assistance and Related Programs (Title V) and General Provisions (Title VII) titles of the FY2019 and FY2020 Agriculture Appropriations Acts. There was no language from the SFOPS bills for a similar table.

The explanatory statement that accompanies the appropriations act, as well as the committee reports that accompany the House and Senate committee-reported bills, can provide statements of support for certain programs or directions to federal agencies on how to spend certain funding provided in the appropriations bill. While these documents generally do not have the force of law, they can express congressional intent. The committee reports and explanatory statement may need to be read together to capture all of the congressional intent for a given fiscal year.

Table 4 compares selected policy-related provisions pertaining to U.S. international food aid programs from the FY2019 and FY2020 House and Senate committee reports and explanatory statement for the FY2020 Agriculture Appropriations Act. Table 5 compares one selected policy-related provision pertaining to U.S. international food assistance programs from the FY2019 and FY2020 House and Senate committee reports and explanatory statement for the FY2020 SFOPS appropriation.


The September 11th Victim Compensation Fund (VCF): Background and Potential Reauthorization

Summary: The September 11 th Victim Compensation Fund (VCF) provides cash benefits to certain persons whose health may have been affected by exposure to debris or toxic substances in the aftermath of the September 11, 2001, terrorist attacks on the Pentagon and the World Trade Center, and the terrorist-related aircraft crash at Shanksville, PA. Congress created the original VCF shortly after the 2001 terrorist attacks to provide compensation to persons injured and to the families of persons killed in the attacks and their immediate aftermath. In 2011, Congress reopened the VCF to provide benefits to persons who responded to the terrorist attack sites, were involved in the cleanup of these sites, or lived in lower Manhattan during the attacks. The VCF was reauthorized in 2015, and it is scheduled to sunset on December 18, 2020.

Summary: The VCF has awarded more than $5 billion since its reopening and is in danger of exceeding its current appropriation of $7.375 billion before its sunset date and thus being unable to pay full benefits. In February 2019, the Special Master of the VCF announced that all future VCF awards would be reduced to prevent the VCF from running out of appropriated funds. The Special Master cites increases in death claims, cancer claims, and claims from non-responders as drivers of the increase in VCF benefit costs.

Summary: Reauthorization bills, H.R. 1327 and S. 546 , have been introduced, with H.R. 1327 being ordered reported out of the Judiciary Committee on June 12, 2019. Both bills would reauthorize the VCF without changing any eligibility categories and appropriate "such sums as may be necessary" for each fiscal year through FY2090. On July 12, 2019, H.R. 1327 was passed by the House of Representatives with amendments that changed the bill's name, changed the provisions for adjusting the maximum amount of income considered for determining noneconomic loss, added up to two Deputy Special Masters to the program's administration, and made the bill's spending exempt from PAYGO requirements.

T he current September 11 th Victim Compensation Fund (VCF) provides cash benefits to certain persons whose health may have been affected by the aftermath of the September 11, 2001, terrorist attacks on the Pentagon and the World Trade Center, and the terrorist-related aircraft crash at Shanksville, PA. The current iteration of the VCF may be unable to pay full benefits to eligible persons and is scheduled to sunset on December 18, 2020. Current VCF data are provided in this report's Appendix .

On September 22, 2001, the Air Transportation Safety and System Stabilization Act (ATSSA; P.L. 107-42 ) was enacted into law. Quickly passed by Congress in the wake of the September 11, 2001, terrorist attacks, this legislation provided various forms of relief to the American airline industry and affirmed Congress's commitment to improving airline safety. Title IV of the ATSSA also established the VCF to compensate persons injured or the representatives of persons killed in the attacks or their immediate aftermath.

The VCF originally closed in 2003 and was reopened in 2011 and expanded to provide compensation to responders to the September 11, 2001, terrorist attacks and others, such as certain New York City residents, who may have suffered health effects in the aftermath of the attacks. The VCF was reauthorized in 2015 and, if not reauthorized in the 116 th Congress, will sunset on December 18, 2020.

The original VCF, as created by Title IV of the ATSSA, provided cash benefits to the following groups of persons who suffered physical injury or death as a result of the terrorist attacks of September 11, 2001:

persons who were present at the World Trade Center, Pentagon, or aircraft crash site in Shanksville, PA, at the time of or in the immediate aftermath of the aircraft crashes at those sites on September 11, 2001; and passengers and crew of any aircraft that crashed on September 11, 2001, as a result of terrorist activity.

The amount of benefits available to each claimant was determined by a Special Master appointed by the Attorney General. The amount of benefits payable to each claimant was based on each person's economic losses (such as loss of future earnings) and noneconomic losses (such as pain and suffering). The VCF statute specifically prohibited the payment of punitive damages. Benefits were reduced by certain collateral source payments, such as life insurance benefits, available to the claimant. There was no cap on the amount of benefits that any one person could receive or on total benefits paid.

By filing a VCF claim, a person waived his or her right to file a civil action or be a party to such an action in any federal or state court for damages related to the September 11, 2001, terrorist-related aircraft crashes. This provision established the VCF as an alternate and expedited route to compensation for victims while providing some protection against lawsuits for damages that may have been brought by victims against the air carriers; airframe manufacturers; the Port Authority of New York and New Jersey, who owned the World Trade Center; or any other entity.

Congress provided funding for the VCF through an appropriation of "such sums as may be necessary" for benefit payment and administration. The Special Master of the VCF was required to promulgate regulations to govern the program within 90 days of the law's enactment, and all claims had to be filed within two years of the regulations' promulgation, at which time the VCF would close. The original VCF received 7,403 claims and made awards totaling $7.049 billion to 5,560 claimants.

The original VCF was closed to new claims in December 2003. However, concerns about injuries and illnesses incurred by persons involved in emergency response, recovery, and debris removal operations at the September 11 th aircraft crash sites led Congress to reopen the VCF with the enactment of Title II of the James Zadroga 9/11 Health and Compensation Act of 2010 (Zadroga Act; P.L. 111-347 ). The reopened VCF extended eligibility for cash benefits to persons who suffered physical injuries or illnesses as a result of rescue, recovery, or debris removal work at or near the September 11 th aircraft crash sites during the period from September 11, 2001, to May 30, 2002, as well as certain persons who lived, worked, or were near the World Trade Center on September 11, 2001.

The VCF was initially reopened for new claims through October 3, 2016. Total benefits and administrative costs paid by the reopened VCF were limited to $2.775 billion, unlike in the original VCF, which had no cap on total funding for benefits, allowing the Special Master to award benefits without considering the benefits' total cost. Under the reopened VCF, attorneys' fees were limited to 10% of the VCF award.

The reopened VCF was scheduled to stop taking claims on October 3, 2016. The VCF was reauthorized on December 18, 2015, with the enactment of Title IV of Division O of the Consolidated Appropriations Act, 2016 (Zadroga Reauthorization Act of 2015; P.L. 114-113 ). Under this reauthorization, claims approved before the reauthorization date are considered Group A claims. Group A claims are subject to the same rules as claims under the reopened VCF and are subject to the $2.775 billion cap on total benefit payments. All other claims filed before the final VCF deadline of December 18, 2020, are considered Group B claims subject to additional rules and funding caps established by the reauthorization legislation. Thus, all current claims are Group B claims.

To be eligible for VCF benefits, a person must have

died as a passenger or crew member on one of the aircraft hijacked on September 11, 2001; died as a direct result of the terrorist-related aircraft crashes or rescue, recovery, or debris removal in the immediate aftermath of the September 11, 2001, terrorist attacks; or been present at a September 11 th crash site in the immediate aftermath of the September 11, 2001, terrorist attacks and suffered physical harm as a direct result of the crashes or the rescue, recovery, and debris removal efforts.

For the purposes of VCF eligibility, the immediate aftermath of the September 11 th terrorist attacks is the time period from September 11, 2001, to May 30, 2002.

For the purposes of VCF eligibility, the September 11 th crash sites include

the World Trade Center, Pentagon, or Shanksville, PA, crash sites; the buildings or portions of buildings that were destroyed as a result of the September 11 th terrorist attacks; the area in Manhattan that is south of the line that runs along Canal Street from the Hudson River to the intersection of Canal Street and East Broadway, north on East Broadway to Clinton Street, and east on Clinton Street to the East River; and any area related to debris removal, such as the debris-removal barges and Fresh Kills in Staten Island, New York.

To be eligible for the VCF, individuals who did not die as passengers or crew members of one of the hijacked aircraft, or as a direct result of the September 11 th terrorist attacks (including rescue, recovery, and debris removal), must have suffered physical harm as a result of the attacks. For the purposes of VCF eligibility, physical harm is demonstrated by the presence of a World Trade Center (WTC)-related physical health condition as defined for the purposes of the World Trade Center Health Program (WTCHP).

A WTC-related physical health condition is a physical health condition covered by the WTCHP. These conditions are those provided in statute at Sections 3312(a) and 3322(b) of the Public Health Service Act (PHSA) and those added through rulemaking by the WTCHP administrator. Per Section 3312(a) of the PHSA, to be covered by the WTCHP and thus compensable under the VCF, a condition must be on the list of covered WTCHP-covered conditions and it must be determined that exposure in the aftermath of the September 11, 2001, terrorist attacks "is substantially likely to be a significant factor in aggravating, contributing to, or causing the illness or health condition." In most cases, the VCF requires that a person's condition be certified by the WTCHP for that condition to be compensable.

The WTCHP provides guidance on how to evaluate if a person's condition meets the standard to be linked to exposure in the aftermath of the September 11, 2001, terrorist attacks. This evaluation is based on a combination of the amount of time a person was physically present at a site and the specific activitiesâsuch as search and rescue, sleeping in a home in Lower Manhattan, or just passing through a siteâin which the person engaged. For example, a person who was engaged in search and rescue activities at the World Trade Center site between September 11 and September 14, 2001, must have been present for at least 4 hours for the WTCHP to certify his or her condition and thus compensable by the VCF, whereas a person whose only activity was passing through Lower Manhattan during the same period, and who was not caught in the actual dust cloud resulting from the buildings' collapse, would have to have been in the area for at least 20 hours to be eligible for compensation. The WTCHP evaluates conditions that do not meet the minimum exposure criteria on a case-by-case basis using "professional judgement" and "any relevant medical and/or scientific information."

WTCHP-covered mental health conditions may not be used to establish VCF eligibility, as the VCF does not include any provisions for benefit payments for mental health conditions.

Cancer as a WTC-Related Physical Health Condition

The WTCHP statute does not include any type of cancer in the list of WTC-related health conditions. However, the statute does require the WTCHP administrator to periodically review the available scientific evidence to determine if any type of cancer should be covered by the WTCHP and, by extension, the VCF. In response to a petition to add conditions to the list of WTC-related health conditions, the WTCHP administrator is required, within 90 days, to either request a recommendation on action from the WTC Scientific/Technical Advisory Committee (STAC) or make a determination on adding the health condition. If the WTCHP administrator requests a recommendation from the STAC, that recommendation must be made within 90 days of its receipt and the WTCHP administrator must act on that request within an additional 90 days.

On September 7, 2011, Representatives Carolyn B. Maloney, Jerrold Nadler, Peter King, Charles B. Rangel, Nydia M. Velazquez, Michael G. Grimm, and Yvette Clarke and Senators Charles E. Schumer and Kirsten E. Gillibrand filed a petition, in the form of a letter to the WTCHP administrator, requesting that the administrator "conduct an immediate review of new medical evidence showing increased cancer rates among firefighters who served at ground zero" and that the administrator "consider adding coverage for cancer under the Zadroga Act." In response to this petition, the WTC administrator requested that the STAC "review the available information on cancer outcomes associated with the exposures resulting from the September 11, 2001, terrorist attacks, and provide advice on whether to add cancer, or a certain type of cancer, to the List specified in the Zadroga Act."

On September 12, 2012, based on the STAC's recommendations, the WTCHP administrator added more than 60 types of cancer, covering nearly every body system and including any cancers in persons less than 20 years of age and any rare cancers, to the list of WTC-related health conditions, thus making these conditions compensable under the VCF.

In a review of the decision to add cancers to the list of WTC-related health conditions, the Government Accountability Office (GAO) found that the WTCHP administrator used a hazards-based approach to evaluate cancers. This approach evaluated whether exposures in the aftermath of the September 11, 2001, terrorist attacks were associated with types of cancer but did not evaluate the probability of developing cancer based on a given exposure. A GAO-convened scientific panel indicated that the hazards-based approach the WTCHP administrator used was reasonable given data constraints and the fact that there is a certification process to determine if a cancer or other condition on the list of WTC-related health conditions meets the statutory requirement of being "substantially likely to be a significant factor in aggravating, contributing to, or causing the illness or health condition." The panel also indicated that this approach could have benefited from an independent peer review process. The WTCHP administrator stated that peer review was not possible given the statutory time constraints to act on the petition and the STAC's recommendation.

One year later, the WTCHP administrator added prostate cancer to the list of WTC-related health conditions. The WTCHP administrator has also established minimum latency periods for certain types of cancer and maximum onset periods for certain types of aerodigestive disorders.

The Civil Division of the Department of Justice administers the VCF. The VCF Special Master, currently Rupa Bhattacharyya decides VCF eligibility and benefits. A claimant dissatisfied with the Special Master's decision on his or her claim may file an appeal and request a hearing before a VCF hearing officer appointed by the VCF. There is no further right of appeal or judicial review of VCF decisions. A claimant may amend his or her claim after a decision has been made if the claimant has new material relevant to the claim.

All claims for VCF benefits must be filed by December 18, 2020, five years after the VCF reauthorization act's enactment. Before filing a claim, a potential claimant must have registered with the VCF by one of the following applicable deadlines:

by October 3, 2013, if the claimant knew, or reasonably should have known, that he or she suffered a physical harm or died as a result of the September 11 th attacks or rescue, recovery, or debris removal efforts, and that he or she was eligible for the VCF, on or before October 3, 2011; within two years of the date the claimant knew, or reasonably should have known, that he or she has a WTC-related physical health condition or died as a result of the September 11 th attacks and is eligible for the VCF.

If a claimant has a condition that is later added to the list of conditions covered by the WTCHP, then the two-year period begins on the later of the dates when a government entity, such as the WTCHP or a state workers' compensation agency, determines that the condition is related to the September 11 th attacks, or when a claimant's condition is added to the list of conditions covered by the WTCHP.

Benefits under the original VCF were not subject to any caps on individual or total payments. When the VCF was reopened, total benefits were subject to a cap of $2.775 billion; however, there were no specific caps on individual benefits. VCF benefits for Group B are subject to caps on noneconomic losses and total benefits.

Benefits under the VCF for Group B claims are determined by the Special Master based on the claimant's economic and noneconomic losses. For noneconomic losses, there is a cap of $250,000 for claims based on cancer and $90,000 for all other claims. However, for cases in which a person's death was caused by a WTC-related health condition, the VCF regulations provide that the presumed award for noneconomic loss is $250,000 plus an additional $100,000 for the person's spouse and each dependent. When calculating economic losses, the Special Master is only permitted to consider the first $200,000 in annual income when determining losses to past earnings and future earning capacity, which limits the amount of economic losses that can be paid. There is a total cap of $4.6 billion for VCF Group B awards. As in past iterations of the VCF, benefits are reduced by certain collateral source payments available to claimants, such as life insurance benefits, workers' compensation payments, and government benefits related to the person's injury or death, such as Social Security Disability Insurance (SSDI) and the Public Safety Officers' Benefits Program (PSOB).

The costs of VCF benefits and administration are not subject to annual appropriations. Rather, costs for Group A benefits and administration were financed by the $2.775 billion in appropriations provided by the Zadroga Act. Costs for Group B benefits and administration are financed by the one-time appropriation of $4.6 billion provided in the Zadroga Reauthorization Act of 2015. Thus, the total funding available for the VCF since its reopening is $7.375 billion. Funding was made exempt from budget sequestration by the Zadroga Reauthorization Act of 2015.

Special Master's Reduction of Future Awards

Total funding for VCF benefits and administrative costs is capped by the $7.375 billion in appropriations that have been provided in the Zadroga Act and Zadroga Reauthorization Act of 2015, with a total cap of $4.6 billion for VCF Group B awards. The VCF statute requires the Special Master to annually reassess VCF policies and procedures to determine if these policies and procedures satisfy the statutory requirements that claimants with the most debilitating physical conditions have their claims prioritized and that total expenditures for awards and administrative costs associated with Group B claims do not exceed the $4.6 billion in available funding.

In October 2018, the Special Master published a Notice of Inquiry in the Federal Register seeking public comments on possible policy changes that the Special Master could consider to ensure there is sufficient funding to administer and pay future VCF claims without exceeding the $4.6 billion cap on Group B expenditures. The Special Master received 28 comments in response to this Notice of Inquiry, of which 16 were relevant to the request for information on possible VCF policy and procedure changes.

In February 2019, the Special Master published her most recent annual assessment of VCF policies and procedures. This report includes two sets of projections of future VCF benefit and administrative costs. One projection is based on historical program data and another projection is based on these historical data, augmented by data on recent program trends. These two models were also used in the 2017 assessment, whereas the 2018 assessment only projected costs based on historical program data.

As shown in Table 1 , the Special Master projects under both models that total VCF program costs by the end of the program will far exceed the $7.375 billion in available funding. This is the first time the Special Master projects that program funding will be insufficient to pay all VCF benefits and administrative expenses.

On June 21, 2019, during testimony before the House Committee on the Judiciary, the Special Master pointed to increases in death claims, cancer claims, and claims from non-responders have played a role in driving projected benefit costs above the amount of available funding Congress provided. The Special Master did not, however, break down how much of the cost increases can be attributed to each of these three factors.

As of May 31, 2019, the Special Master has determined that 1,057 death claims are eligible for the reopened VCF. Of these, award decisions based on economic and noneconomic loss have been made in 856 cases. As a comparison, the original VCF paid awards in 2,880 cases of death. Because there is a regulatory presumption of noneconomic loss of $250,000 for the decedent and an additional $100,000 for the spouse and any dependents, noneconomic loss awards in death cases have the potential to be larger than those in injury cases.

Since the VCF's reauthorization in 2015, the number of eligible and awarded death cases has increased significantly. For claims paid prior to reauthorization (Group A claims), awards were paid in 17 death cases. Thus, in less than four years since reauthorization, there has been a nearly 5,000% increase in death awards. Of the 839 death awards paid since reauthorization, 517 were awarded in the period between April 30, 2018, and April 30, 2019, with an additional 43 claims paid in May 2019. Through the end of May 2019, there has been an average of more than 35 new eligibility decisions and more than 48 new awards in death claims per month.

Although the Special Master does not discuss the causes of the increases in death claims, the nature of many of the compensable medical conditions, especially certain types of cancer with low survival rates, means that many persons eligible for compensation from the VCF will likely die as a result of their WTC-related health conditions, thus possibly making their families eligible for death compensation.

Cancers were first added to the VCF as compensable conditions in September 2012. Since then, there have been 8,734 cases with at least one form of cancer determined to be eligible for the VCF. As of the end of April 2019, eligible claims with at least one type of cancer made up 37% of all eligible VCF claims.

As shown in Table 2 , the most significant growth in cancer claims occurred shortly after cancers were added to the list of WTC-eligible health conditions and also in the most recent year. Between September 30, 2014, and December 31, 2015, the number of eligible claims with cancer as the only compensable condition (cases that would not otherwise be eligible for the VCF if not for the addition of cancer) increased 194% from 472 claims to 1,387 claims. This increase is understandable and expected given that this was early in the period during which cancer claims were first eligible for compensation. However, the recent increase in eligible cancer-only claims as a percentage of all eligible claims is one of the factors that drove the projected program costs, which were just below total available funds in the 2018 assessment, over the funding cap in the 2019 assessment. In 2018, the number of eligible cancer-only claims increased 58%. At the end of 2018, eligible cancer-only claims made up 18% of all eligible claims.

The increase in eligible cancer claims is notable for three reasons. First, no types of cancer were compensable when the VCF was originally reopened in 2010 and no cancers were included in the list of WTC-related health conditions created by Congress in the Zadroga Act. Cancers were added to the list of covered conditions by the WTCHP administrator in two determinations made in 2012 and 2013. These determinations resulted in more than 60 types of cancer covering nearly every body system being compensable under the VCF.

Neither the VCF nor WTCHP statutes include any specific provisions requiring any follow-up or continuous review of scientific evidence to determine if, in the nearly seven years since these determinations were made, there is any additional evidence to support or refute including these types of cancers in the list of WTC-related health conditions compensable under the VCF. The GAO cited limitations on data available in 2012 as a reason that its scientific panel found the WTCHP administrator's use of a hazards-based rather than probability model to add cancers to the list of WTC-related health conditions reasonable. Given the increases in the number of persons receiving services from the WTCHP and developing cancer in the years since the 2012 and 2013 cancer determinations, there may be additional data to warrant reevaluating the list of covered cancers or evaluating the likelihood of developing cancer after different types of exposures in the aftermath of the September 11, 2001, terrorist attacks.

In addition, the VCF covers a wide range of persons from firefighters and police officers who were the first responders to the attacks, to construction and other workers who were involved in debris removal, and to adults and children who were in lower Manhattan at the time of the attacks, all of whom may have had different types and durations of exposure to toxic substances in the aftermath of the attacks. Although the determination that a person's health condition was linked to his or her exposure in the aftermath of the September 11, 2001, terrorist attacks is based on a combination of duration and nature of exposure, the list of covered conditions, including all cancers except childhood cancer, applies equally to all persons with no accounting for individual exposure experience.

Second, the VCF is a program of presumptive eligibility. Thus, when determining eligibility for the VCF, controlling factors such as genetics, age, behaviors such as tobacco use, or exposure to other toxins are not considered and the Special Master does not make a determination as to the probability that a person's exposure in the aftermath of the September 11, 2001, terrorist attacks caused his or her cancer. Rather, the only requirement that a cancer or other health condition be linked to a person's exposure in the aftermath of the attacks is the WTCHP's determination that such exposure "is substantially likely to be a significant factor in aggravating, contributing to, or causing the illness or health condition." In addition, the WTCHP administrator did not consider the likelihood or probability that any given cancer would occur based on the hazards experienced in the aftermath of the September 11, 2001, attacks when cancers were added to list of WTC-related health conditions.

This approach is different than the probability of causation model used for some cancer claims under Part B of the Energy Employees Occupational Illness Compensation Program Act (EEOICPA), in which the probability that a person's cancer was caused by occupational exposure to ionizing radiation must be 50% or greater to receive compensation. The VCF's presumptive eligibility model is also in contrast to the probability of causation model recommended by the National Research Council Board on Radiation Effects Research to be used to determine eligibility for benefits under the Radiation Exposure Compensation Act (RECA) for persons who lived near the Nevada Test Site during atmospheric atomic weapons testing. However, the presumptive eligibility model is used for other federal compensation programs, including disability compensation for veterans exposed to radiation and Agent Orange.

Third, cancer claims have the potential to result in higher benefits than non-cancer claims. The cap on noneconomic loss awards for cancer claims is $250,000 versus $90,000 for non-cancer claims.

Since it was reauthorized in 2015, the VCF has paid awards to an increasing number of non-responders. For claims paid prior to reauthorization (Group A claims), awards to non-respondersâincluding those who participated in cleaning or maintenance work near one of the crash sites or persons who lived in, worked in, attended school in, or were visiting lower Manhattan between September 11, 2001, and May 30, 2002âmade up 14% of total initial compensation awards. As of the end of 2018, the percentage of total awards made to non-responders had risen to 19% of total initial awards.

Although the Special Master cites the increase in non-responder claims as one of the causes of the increase in VCF benefit costs and the recent projection that program costs will exceed available funding, limitations in the data reported by the VCF make analyzing this potential cost driver difficult. In her congressional testimony, the Special Master states "At the time of Reauthorization in December 2015, not quite 14% of all VCF awards were paid to non-responders. Today, just about 38% of claims filed are from this population." However, this is not a direct comparison, as the Special Master is comparing data on awards with data on claims filed, regardless of whether those claims result in awards without any additional information on the percentage of claims filed that may result in awards. In addition, the data reported by the VCF in its annual status reports are, according to the VCF, self-reported data. Finally, in each year's data on claimant categories, there are a number of cases listed as "no response." Of the 20,981 initial awards reported in the VCF's most recent status report, for example, 370 cases, or 2% of total awards, are listed in the "no response" category.

Because award costs under both models are projected to exceed the $7.375 billion in available funding, in February 2019, the Special Master announced the following reductions in the amounts of all future VCF awards for all cases pending as of February 25, 2019:

For all cases filed on or before February 1, 2019; the calculated award is to be reduced by 50%; For all cases that qualify for expedited processing because the claimant has a terminal illness or significant financial hardship, the calculated award is to be reduced by 50%; and For all cases filed after February 1, 2019, the calculated award is to be reduced by 70%.

In all cases, the full amount of any offsets for collateral source payments are to continue to be taken.

The award reductions are not to apply to appeals decisions initially issued before February 25, 2019. However, there will be scheduling adjustments for future appeals. For appeals of noneconomic loss decisions, the VCF is to schedule appeals hearings only for cases involving the most severe conditions, such as cancer, interstitial lung disease, and sarcoidosis. For all other noneconomic loss and economic-loss cases, the VCF is not to schedule appeals hearings until after December 18, 2020. These schedule changes are designed to ensure that there is sufficient funding to pay increased noneconomic loss determinations made on appeal for the most severe conditions.

Potential VCF Reauthorization in the 116th Congress

The VCF is scheduled to sunset on December 18, 2020. The 116 th Congress faces the question of whether to reauthorize the program or let it expire. On June 12, 2019, the House Committee on the Judiciary ordered that H.R. 1327 , the Never Forget the Heroes: Permanent Authorization of the September 11 th Victim Compensation Fund Act, be reported. Identical legislation, S. 546 , is pending committee action in the Senate.

This reauthorization legislation includes the following major components:

authorization for the VCF through FY2090, with a deadline of October 1, 2089, to file claims; removal of the cap on VCF funding; appropriations of "such sums as may be necessary" for the VCF for each fiscal year through FY2090; payment of the difference between the full award and the actual amount received for all persons who received reduced awards due to the Special Master's actions; authority for the Special Master to exceed the limit on noneconomic loss if it is determined that a person's pain and suffering is of such severity as to make the award "insufficiently compensatory"; and a cost of living adjustment, to be made every five years, to the maximum amount of annual income permitted to be considered by the Special Master when determining economic loss (currently $200,000).

The reauthorization legislation would not make any changes to the basic eligibility for VCF awards. The legislation also would not specifically address the three drivers of increased VCF costs that the Special Master identified in her 2019 congressional testimony: (1) increases in death claims, (2) cancer claims, and (3) claims from non-responders. However, because this legislation would provide full funding for the VCF not subject to annual appropriations, any increases in program costs would not result in the VCF having insufficient funding to pay all benefits. The Congressional Budget Office has estimated that this legislation, if enacted, would result in $6.785 billion in direct spending on benefits and administration between FY2019 and FY2024 and $10.180 billion in spending between FY2019 and FY2029.

House Passage of Reauthorization Legislation

On July 12, 2019, the House of Representatives passed H.R. 1327 with the following amendments:

the bill's title was changed to the "Never Forget the Heroes: James Zadroga, Ray Pfeifer, and Luis Alvarez Permanent Authorization of the September 11 th Victim Compensation Fund Act"; the appropriations of "such sums as may be necessary" for the VCF for each fiscal year through FY2090 is changed to include each fiscal year through FY2092, and the deadline for filing claims is changed from October 1, 2089, to October 1, 2090; the authority for the Special Master to exceed the limit on noneconomic loss is changed from requiring a determination that a person's pain and suffering is of such severity as to make the award "insufficiently compensatory" to a determination that the claim "presents special circumstances"; the original bill's requirement that the Special Master apply a cost-of-living adjustment to the maximum amount of annual income permitted to be considered when determining economic loss (currently $200,000) every five years was replaced with a provision requiring the Special Master to "periodically" adjust the limit "to account for inflation"; a provision was added permitting the Attorney General to appoint up to two Deputy Special Masters and providing that the Special Master and the deputies serve at the pleasure of the Attorney General; and a provision was added specifying that the legislation's budgetary effects shall not be entered on the statutory or Senate PAYGO scorecards, thus making the legislation exempt from PAYGO requirements that new legislative spending not increase the deficit.

Appendix. September 11th Victim Compensation Fund Awards and Amounts