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CRS — Contracting with Inverted Domestic Corporations: Answers to Frequently Asked Questions (November 7, 2014)

November 18, 2014 Comments off

Contracting with Inverted Domestic Corporations: Answers to Frequently Asked Questions (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Recent reports that certain entities continued to receive federal government contracts after reincorporating overseas have prompted questions about current and proposed restrictions on contracting with “inverted domestic corporations.” These questions are shaped, in part, by the broader debate over whether such corporations are to be seen as “deserters,” who change their corporate citizenship to avoid paying U.S. taxes, or as evidencing systemic problems in the U.S. tax code. However, they also reflect a long-standing debate over whether the federal procurement process should be used to promote particular socioeconomic goals which some assert are tangential to the primary purpose of the procurement process (i.e., acquiring the supplies and services that best meet the government’s needs at the lowest price).

Congress has sought to discourage corporate inversions by barring certain contracts with inverted domestic corporations ever since it enacted the Homeland Security Act of 2002 (P.L. 107-296, §835). As amended, this act prohibits the Department of Homeland Security from awarding a contract to an inverted domestic corporation, or a subsidiary thereof, unless the Secretary of Homeland Security determines that a waiver is necessary in the interest of national security. The act also establishes its own definition of inverted domestic corporation, which is different from that in the Internal Revenue Code. Subsequent legislation imposed similar prohibitions upon other agencies, although only as to funds appropriated or otherwise made available under specific acts of Congress. However, some commentators have argued that inverted domestic corporations have continued to receive federal contracts because of “loopholes” or “gaps” in these measures. Thus, some Members of the 113th Congress have proposed legislation—or requested executive action—to reduce or remove opportunities for inverted domestic corporations to receive government contracts.

This report provides the answers to 14 frequently asked questions regarding the current restrictions on contracting with inverted domestic corporations, proposed amendments thereto, and the relationship between prohibitions upon contracting with inverted domestic corporations and other provisions of law that restrict dealings with “foreign” contractors.

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EPA’s Clean Power Plan Proposal: Are the Emission Rate Targets Front-Loaded?, CRS Insights (November 3, 2014)

November 18, 2014 Comments off

EPA’s Clean Power Plan Proposal: Are the Emission Rate Targets Front-Loaded?, CRS Insights (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

On June 18, 2014, the Environmental Protection Agency (EPA) proposed regulations (the “Clean Power Plan”) addressing carbon dioxide (CO2) emissions from existing fossil fuel-fired electric generating units. Carbon dioxide is the primary human-related greenhouse gas that contributes to climate change, and these electric generating units, as a group, account for the largest source of CO2 emissions in the United States.

The proposal would establish state-specific CO2 emission rate targets measured in pounds of CO2 emissions per megawatt-hour (MWh) of electricity generation. The targets include both a 2030 goal and an interim goal to be achieved “on average” between 2020 and 2029. States would prepare and submit to EPA implementation plans describing the state-specific activities that would achieve the emission rate targets.

Assuming the proposal becomes a final rule in June 2015, states would then have until June 30, 2016, to submit their implementation plans. However, states could request an additional year for submission of a complete plan, provided that they have taken “meaningful steps” toward completion by the 2016 deadline. Alternatively, states participating in a multistate plan would have until June 30, 2018, to submit a plan.

Federal Taxation of Marijuana Sellers, CRS Legal Sidebar (November 6, 2014)

November 18, 2014 Comments off

Federal Taxation of Marijuana Sellers, CRS Legal Sidebar (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

As several states have permitted the use of marijuana for medical and recreational uses, one question that arises is what are the federal income tax consequences for businesses that sell marijuana?

There is no question that income from selling marijuana is taxable to the seller, regardless of whether such sale is legal or not under federal or state law. The Internal Revenue Code (IRC) uses a very broad definition of income, and income is taxable whether it comes from legal or illegal activities. Further, it can be taxed even if the proceeds are forfeited to the government.

Treating Ebola Patients in the United States: Health Care Delivery Implications, CRS Insights (November 4, 2014)

November 14, 2014 Comments off

Treating Ebola Patients in the United States: Health Care Delivery Implications, CRS Insights (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

On September 30, 2014, the Centers for Disease Control and Prevention (CDC) confirmed the first case of Ebola diagnosed in the United States. This patient was the first in the United States to be treated for Ebola outside of a specialty hospital with a biocontainment unit. Shortly after this diagnosis, CDC Director Thomas Frieden expressed his confidence in the U.S. health care system, stating that we will “stop Ebola in its tracks.” Despite the assurances, two nurses who cared for the patient were diagnosed with and have since recovered from Ebola. In the wake of these additional cases, Dr. Frieden stated that the agency has had to reconsider its approach to containing the disease. In addition, the hospital where the patient received his care, Texas Health Presbyterian Hospital, has stated that it may have done things differently.

While the U.S. health care system has the resources to effectively identify and treat Ebola cases, a situation that is novel, emergent, and resource-intensive may test the system’s ability to effectively mobilize those resources. The care of the initial U.S. patient highlighted several system delivery issues, including (1) inefficient use of finite healthcare resources due, at least in part, to gaps in preparation; (2) challenges in coordination between local, state, and federal public health systems and the health care delivery system, including in basic infection control procedures; and (3) care coordination issues. This Insight focuses only on the first issue.

See also: The Administration’s Supplemental Request for Ebola and Other Infectious Diseases, CRS Insights (November 7, 2014) (PDF)

CRS — Federal Deductibility of State and Local Taxes (November 10, 2014)

November 14, 2014 Comments off

Federal Deductibility of State and Local Taxes (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Under current law, taxpayers who itemize can deduct state and local real estate taxes, personal property taxes, and income taxes from federal income when calculating taxable income. In addition, a temporary deduction for sales taxes in lieu of income taxes was available, through December 31, 2013. The federal deduction for state and local taxes results in the federal government paying part of these state and local taxes through lower federal tax collections. Theory would suggest that taxpayers are willing to accept higher state and local tax rates and greater state and local public spending because of lower federal income taxes arising from these deductions. In addition, there is some evidence that state and local governments rely more on these deductible taxes than on nondeductible taxes and fees for services.

CRS — Staff Pay Levels for Selected Positions in Senators’ Offices, FY2009-FY2013 (November 3, 2014)

November 13, 2014 Comments off

Staff Pay Levels for Selected Positions in Senators’ Offices, FY2009-FY2013
Source: Congressional Research Service (via Federation of American Scientists)

This report provides pay data for 16 staff position titles that are typically deployed in Senators’ offices. The positions include the following: Administrative Director; Casework Supervisor; Caseworker; Chief of Staff; Communications Director; Counsel; Executive Assistant; Field Representative; Legislative Assistant; Legislative Correspondent; Legislative Director; Press Secretary; Scheduler; “Specials Director,” a combined category that includes the job titles Director of Projects, Director of Special Projects, Director of Federal Projects, Director of Grants, Projects Director, or Grants Director; Staff Assistant; and State Director. Senators’ staff pay data for the years FY2009-FY2013 were derived from a random sampling of Senators’ offices in which at least one staff member worked in a position in each year.

See also: Staff Pay Levels for Selected Positions in House Member Offices, 2009-2013 (November 3, 2014) (PDF)

CRS — Federal Pollution Control Laws: How Are They Enforced? (October 7, 2014)

November 12, 2014 Comments off

Federal Pollution Control Laws: How Are They Enforced? (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

As a result of enforcement actions and settlements for noncompliance with federal pollution control requirements, the U.S. Environmental Protection Agency (EPA) reported that, during FY2013, regulated entities committed to invest an estimated $7.0 billion for judicially mandated actions and equipment to control pollution (injunctive relief), and $22.0 million for implementing mutually agreed-upon (supplemental) environmentally beneficial projects. EPA estimated that these compliance/enforcement efforts achieved commitments to reduce or eliminate 1.3 billion pounds of pollutants in the environment, primarily from air and water, and to treat, minimize, or properly dispose of 148 million pounds of hazardous waste. Noncompliance with federal pollution control laws remains a continuing concern. The overall effectiveness of the enforcement organizational framework, the balance between state autonomy and federal oversight, and the adequacy of funding are long-standing congressional concerns.

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