Introduction While periodic, omnibus farm bills focus on agricultural and food policy, they also contain provisions addressing rural community and economic development. The U.S. Department of Agriculture (USDA), through its Rural Development agency (RD), administers a broad portfolio of programs focused on rural housing, rural infrastructure, and rural business and employment. Congress considers reauthorizing and amending many of these programs in periodic farm bills. The most recent is the Agriculture Improvement Act of 2018 (2018 farm bill, P.L. 115-334 ). The 2018 farm bill generally authorizes programs and funding levels for the period FY2019-FY2023, though some provisions apply to different periods, such as FY2019-FY2025. Since 1973, farm bills have included a title dedicated to rural development. The Rural Development title (Title VI) of the 2018 farm bill generally addresses (1) rural infrastructure, including housing, electrical generation and transmission, water and wastewater, and more recently, broadband deployment; (2) rural economic development; and (3) rural business creation and expansion. The Miscellaneous title (Title XII) also includes certain rural development provisions related to RD personnel, federal task forces or working groups, and other federal rural development programs. Programs authorized in other titles of P.L. 115-334 may benefit rural areas, especially rural areas with economies reliant on agriculture. However, most rural development provisions in the Rural Development and Miscellaneous titles specifically target rural areas. A number of issues influenced the rural development provisions of the 2018 farm bill. Many rural communities have experienced decreasing populations over the last decade. In addition, some rural residents struggle to access employment opportunities, especially in high-wage jobs. The ongoing opioid crisis and an increasing number of rural hospital closures have raised concerns about the health of rural residents. Aging infrastructure, such as electric or drinking water infrastructure, also presents a challenge to some rural communities. The digital divide âlower rates of broadband access in rural areas compared to urban areasâhas raised concerns that rural residents may be less able to access opportunities and services such as distance learning, telemedicine, and e-commerce. In addition, policymakers and scholars have increasingly examined regional approaches to rural economic development rather than approaches focused on individual communities. The 2018 farm bill includes new provisions and programs related to rural broadband deployment, health care, and community development. The law also reauthorizes and amends existing programs related to broadband deployment, other rural infrastructure, and community development. P.L. 115-334 amends multiple definitions of rural used to determine eligibility for RD programs. The law also amends programs that address regional approaches to rural economic development. Further, P.L. 115-334 repeals some rural development programs and makes technical corrections to statutory language authorizing other programs. This report provides a brief overview of federal rural development programs. It then analyzes issues that influenced the development of rural development provisions in the 2018 farm bill. Next, the report details new rural development programs and entities created and changes made to existing rural development programs, in P.L. 115-334 . The Appendix provides a side-by-side comparison of each provision in the Rural Development title, as well as each rural development provision in the Miscellaneous title, of the 2018 farm bill with prior law. Federal Rural Development Programs The Rural Development Policy Act of 1980 ( P.L. 96-355 ) named USDA as the lead federal agency for rural development. RD is the mission area within USDA responsible for rural infrastructure and economic development assistance. Three agencies comprise RD: the Rural Business-Cooperative Service, the Rural Housing Service, and the Rural Utilities Service (RUS). RD programs are largely loan and grant programs that assist communities with small populations to finance development projects. Many RD programs have statutory authority in the Consolidated Farm and Rural Development Act of 1972 (the ConAct, P.L. 87-128) or the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.). RD programs typically rely on annual appropriations for funding, but omnibus farm bills also authorize mandatory funding for some RD programs. The most recent of these, the 2018 farm bill, reauthorizes or amends existing RD programs and authorizes new RD programs by amending the ConAct, the Rural Electrification Act, or other authorizing legislation. The 2018 farm bill also authorizes some rural development programs or entities administered outside USDA. For example, the law authorizes the Federal Communications Commission (FCC) to establish a new task force on precision agriculture connectivity. It also reauthorizes federal regional commissions, such as the Appalachian Regional Commission. Issues Influencing the 2018 Farm Bill's Rural Development Provisions A number of economic and social issues in rural America influenced the rural development provisions of the 2018 farm bill. Rural policy issues that influenced the 2018 farm bill include: rural population decline; rural underemployment; rural health issues, including the ongoing opioid crisis and an increasing rate of hospital closures in rural areas; aging rural infrastructure and a lack of access to broadband internet in rural areas; and a shift among some scholars and policymakers towards supporting regional approaches to rural economic development. Between 2010 and 2017, the number of people living in nonmetropolitan counties declined by approximately 223,000. Additionally, over 1,300 nonmetropolitan counties experienced population loss ( Figure 2 ). While the overall U.S. rural population declined, rates of population change varied among rural areas. Populations declined in many rural counties dependent on agriculture and manufacturing, while populations increased in many rural counties dependent on recreation. Population decline results from a combination of out-migration, declining birth rates, and increased mortality. Research has attributed rural out-migration to many factors, including lack of employment opportunities and less access to education, health care, and cultural amenities. Congress sought to address rural population decline in the 2018 farm bill through rural infrastructure, business development, and community development. Historically, agriculture and rural policy were closely linked due to the high percentage of rural Americans employed in agriculture. This link has weakened due to the changing nature of rural employment. In 2017, the agriculture sector accounted for 5.6% of rural jobs, down from 6.8% in 2001. In addition, USDA estimates that approximately 80% of total farm household income in 2019 will come from off-farm activities. Manufacturing has also been an important source of employment in rural areas, being responsible for a larger share of jobs in rural counties than in urban counties. In 2017, manufacturing employed 10.8% of the rural workforce, declining from 14.1% in 2001. Congress sought to address rural employment in the 2018 farm bill through entrepreneurship, business development, broadband deployment, and access to credit. Rural health issues also influenced the 2018 farm bill's rural development provisions. Policymakers continue to look for solutions to address the opioid epidemic that began in the 1990s. Though this epidemic has affected urban, suburban, and rural areas, the drug overdose death rate in rural areas increased at a faster rate than in urban areas between 1990 and 2015. In addition, many scholars and interest groups have asserted that the federal government's approach to mitigating the opioid crisis in rural areas should differ from the strategy for urban areas. While federal, state, and local governments have addressed the epidemic, drug overdose rates remain high. In addition, a rise in the number of rural hospital closures has increased concerns about access to health care in rural areas. According to the U.S. Government Accountability Office (GAO), 64 rural hospitals closed between 2013 and 2017, more than twice as many as during the previous five-year period. These hospital closures will likely result in rural residents having to travel greater distances for emergency medical care. In the 2018 farm bill, Congress included provisions related to refinancing of rural hospital debt, funding for opioid abuse prevention and treatment, and coordination of federal rural health efforts. Aging infrastructure continues to be a concern for rural areas. According to GAO, "many rural communities face significant challenges in financing the costs of replacing or upgrading aging and obsolete drinking water and wastewater infrastructure." Because communities typically pay for drinking water infrastructure through rates charged to users, more sparsely populated communities have difficulty financing major infrastructure construction or upgrades. Some rural communities also lack the resources to assess infrastructure needs. Similar challenges exist to upgrading and maintaining rural housing and electricity infrastructure. The 2018 farm bill includes provisions related to rural infrastructure loan and grant programs, technical assistance for infrastructure planning, and prioritizing water infrastructure funding to address a public health crisis. Additionally, scholars and policymakers have asserted that access to broadband internet is important for economic and community development in rural areas. According to the most recent FCC deployment data, as of December 2017, 26% of Americans in rural areas and 32% of Americans on tribal lands lack access to broadband at speeds of at least 25 megabits per second (Mbps) download and 3 Mbps upload. In comparison, 1.7% of Americans in urban areas lack access to broadband at 25/3 Mbps. The 2018 farm law includes provisions related to broadband deployment, federal program coordination, and the use of broadband for precision agriculture. Some scholars and policymakers increasingly support a regional approach to rural economic development. Rather than focus on individual towns or communities, which may compete for jobs and residents, a regional approach draws on the strengths and opportunities of different localities within a region and involves coordination across communities. The 2018 farm bill contained provisions related to federal regional commissions, technical assistance for regional planning, and prioritizing projects that support a strategic community development plan. Rural Development Provisions in the Agriculture Improvement Act of 2018 (P.L. 115-334) This section summarizes the rural development provisions in the 2018 farm bill. It provides an overview of new rural development provisions. It also summarizes provisions that reauthorize or amend federal statutes related to existing rural development programs and requirements. In addition to amending programs, the farm bill authorizes programs to receive mandatory or discretionary funding. Congress controls the level of discretionary funding through the subsequent enactment of annual appropriations. Congress controls the level of mandatory funding outside of the appropriations process based on payments made as a direct consequence of statutory requirements. Most RD programs rely on discretionary funding. New Provisions in the 2018 Farm Bill Section 6101 directs USDA to set aside at least 20% of annual funds appropriated for the Distance Learning and Telemedicine Program for FY2019-FY2025 for telemedicine projects that provide substance use disorder treatment services. It also directs USDA to prioritize funding for Community Facilities Direct Loans and Grants and Rural Health and Safety Education Grants for projects that provide substance use disorder treatment, education, and prevention. The provision also authorizes the Secretary of Agriculture to temporarily prioritize assistance under certain RD programs to help rural communities respond to a significant public health disruption . Section 6202 of the 2018 farm bill authorizes a new rural broadband deployment program to fund middle mile infrastructure . Middle mile infrastructure is infrastructure that does not connect directly to an end user (such as a business or household) but rather connects a local network to the larger internet backbone. The provision authorizes $10 million per year for loans and grants for FY2019-FY2023, subject to annual appropriations. Section 6208 adds a new section to the Rural Electrification Act that addresses environmental reviews for rural broadband programs. The new language authorizes USDA to obligate, but not disburse, loan or grant funds before the completion of an environmental, historical, or other review. The funds may be obligated if USDA determines that a subsequent review will be adequate and easily accomplished. Section 6213 authorizes USDA to use existing regulations for the Rural Broadband Access and Community Connect programs for up to one year until USDA issues a final rule implementing the 2018 farm bill changes. Section 6212 establishes procedures for federal broadband program coordination . It directs the National Telecommunications and Information Administration (NTIA) at the U.S. Department of Commerce to assist USDA with verifying applicant eligibility for USDA rural broadband programs. The provision also directs USDA and the FCC to coordinate before providing broadband assistance to prevent duplication. It requires USDA, NTIA, and the FCC to submit a report to Congress within one year of the farm bill's enactment on how to best coordinate federal broadband programs and activities. Section 6214 establishes a Broadband Integration Working Group to conduct a survey of all current federal assistance for broadband deployment. The provision also directs the working group to make recommendations to address regulatory barriers and incentivize investment in broadband deployment and adoption. The working group includes numerous federal agencies. The administrator of RUS, Assistant Secretary for Communications and Information at the Department of Commerce, director of the National Economic Council, and director of the Office of Science and Technology Policy at the White House co-chair the working group. Section 12511 directs the FCC to establish a task force on precision agriculture . Duties of the task force include identifying and measuring current gaps in broadband internet access on agricultural land and making policy recommendations to promote broadband deployment on unserved agricultural land. Section 6419 authorizes USDA to make grants to eligible entities to provide technical assistance and training to support applications for Rural Business-Cooperative Service programs . Eligible entities may use grants to assist communities in planning for business and economic development needs, identifying public and private financing options, and preparing applications and materials to request financial assistance. The law authorizes appropriations of $5 million per year for the program for FY2019-FY2023. Section 6302 directs USDA to provide technical assistance to t ribal entities to improve the entities' access to RD programs. The provision requires technical assistance to address the unique challenges faced by tribal governments, producers, businesses, and tribally designated housing entities in accessing RD programs. Section 12510 directs USDA to establish Tribal Promise Zones that are to receive priority consideration for federal grant programs and initiatives. Criteria for Tribal Promise Zones include unemployment rates, poverty rates, vacancy rates, household income, and the effectiveness of a competitiveness plan submitted by nominating entities. Prior to the 2018 farm bill's enactment, the federal government had designated certain tribal areas as Tribal Promise Zones under an existing Promise Zones initiative at the Department of Housing and Urban Development (HUD). Section 12510 directs the Secretary of Agriculture to re-designate any previously designated Tribal Promise Zone. Section 6424 establishes a new Rural Innovation Stronger Economy Grant Program to establish job accelerators in rural regions. Grant awards may be between $500,000 and $2 million, and applicants must provide at least 20% of project funds. Eligible applicants may use funds for a variety of purposes, including linking rural communities and entrepreneurs to markets, facilitating the repatriation of high-wage jobs to the United States, and identifying and building assets in rural communities. The provision authorizes annual appropriations of $10 million per year for FY2019-FY2023. Section 6306 creates a Council on Rural Community Innovation and Economic Development , comprised of various executive branch departments and agencies, to coordinate federal engagement with rural stakeholders and make recommendations to streamline and leverage federal investments in rural areas. The provision also establishes a Rural Smart Communities Working Group and a Jobs Accelerator Working Group within the council. Section 6103 authorizes USDA to use loans or loan guarantees under certain rural business or infrastructure programs to refinance rural hospital debt . Congress permits USDA to assist a rural hospital with refinancing debt if "the assistance would help preserve access to a health service in a rural community, meaningfully improve the financial position of the hospital, and otherwise meet the financial feasibility and adequacy of security requirements of the Rural Development Agency." Section 12409 directs USDA to establish a Rural Health Liaison who would integrate rural health activities across USDA, coordinate with the Secretary of Health and Human Services, and provide technical assistance to USDA outreach, extension, and county offices. Other Major Provisions Broadband and Telecommunications Section 6201 reauthorizes and makes a number of amendments to the Rural Broadband Access Program (also known as the Farm Bill Loan Program): Increases authorized funding for the program from $25 million to $350 million per year for the period FY2019-FY2023. Authorizes 3%-5% of annual program funding for technical assistance and training to applicants applying to provide broadband service to communities that lack broadband at speeds of at least 10/1 Mbps. Adds a grant component to the program to the existing direct and guaranteed loan components. To be eligible for a grant, at least 90% of households in the proposed service area âthe area in which an applicant proposes to deploy broadbandâmust lack access to broadband at minimum speeds. Applicants must provide matching funds of 25%-75% of the project cost, depending on the population density of the proposed service area. Amends the eligibility criteria for loans to require at least 50% of households in proposed service areas to lack access to broadband service at minimum speeds. Under prior law, this threshold was 15% of households. Increases the minimum acceptable broadband speeds for the program from 4/1 Mbps to 25/3 Mbps. These minimum speeds determine both eligibility criteria and buildout requirements. USDA uses the minimum speeds to determine whether areas lack sufficient broadband service and are therefore eligible for program funding (see above two bullet points). USDA also requires all loan or grant recipients to provide broadband service that meets the minimum speeds. Directs USDA to prioritize applications that serve communities with a population of fewer than 10,000 residents; serve communities experiencing out-migration; provide broadband to cropland and ranchland for use in precision agriculture; and were developed with, and received funding from, community stakeholders, among other prioritization criteria. Increases the maximum time to complete buildout of broadband infrastructure to five years. Under prior law, the maximum buildout time was three years from when USDA made assistance available. Directs USDA to establish broadband buildout requirements âthe level of internet service an applicant must provide for the duration of a project agreement. Section 6201 also directs USDA to project minimum acceptable service standards for projects with agreements of 5-10, 11-15, 16-20, and more than 20 years. Applicants must demonstrate the ability to furnish or improve service in order to meet the broadband buildout requirements. The conference report contains language further explaining congressional intent. Authorizes USDA to provide payment assistance for certain loan and grant recipients. This includes reduced interest rates or allowing borrowers to defer payments. Directs USDA to charge fees to lenders in amounts that reduce the cost of subsidies for guaranteed loans but are not a barrier to program participation. Moves certain provisions regarding notice requirements, default and deobligation, and service area assessment to other sections of the Rural Electrification Act and makes amendments to these relocated provisions. These provisions still apply to the Rural Broadband Access Program. Section 6201 also removes language regarding paperwork reduction, the preapplication process, and the number of application evaluation periods per year. Section 6102 reauthorizes the Distance Learning and Telemedicine Program through FY2023 and increases the authorization for annual appropriations from $75 million to $82 million per year. Section 6204 codifies the Community Connect Program and authorizes funding of $50 million per year for FY2019-FY2023. Previously, Congress had authorized the program in annual Agriculture appropriations bills. Section 6203 reauthorizes the Rural Gigabit Network Pilot Program and renames it the Innovative Broadband Advancement Program . Congress authorizes USDA to provide loans or grants to decrease the cost of broadband deployment and increase broadband speeds. Eligible applicants must agree to complete project buildout within five years and increase broadband speeds to at least the minimum broadband buildout requirements established for the Rural Broadband Access Program. Congress authorizes appropriations of $10 million per year for FY2019-FY2023. Section 6205 establishes criteria for outdated broadband systems . Beginning October 1, 2020, USDA must consider any portion of a service territory that is subject to an outstanding USDA grant agreement to be unserved if broadband speeds in that portion of a service territory are less than 10/1 Mbps. The provision includes an exception for broadband service providers that have constructed, or begun to construct, broadband facilities that meet the minimum speeds for the Rural Broadband Access Program. As mentioned earlier in this section, Section 6201 set minimum broadband speeds for the Rural Broadband Access Program at 25/3 Mbps. Section 6207 creates a new section of the Rural Electrification Act that addresses public notices, service area assessments, and reporting requirements under USDA rural broadband programs. The provision includes both new language and language moved from other sections of the Rural Electrification Act. It moves language related to public notice requirements, service area assessments, and reporting from the section of the Rural Electrification Act that authorizes the Rural Broadband Access Program to this newly created section. Moving this language makes it applicable to certain other programs authorized in the Rural Electrification Act in addition to the Rural Broadband Access Program. Section 6207 also makes the following amendments: Directs USDA to publish information on applications and funding awards for rural broadband programs in a searchable database on the RUS website. The database must be available to the public. Gives internet service providers at least 45 days to respond to a public notice of application, in contrast to at least 15 days under prior law. Providers may submit information on any broadband service the provider currently offers in the area identified in an application. This information helps USDA determine whether a proposed area meets program eligibility requirements. Exempts from certain Freedom of Information Act requirements information submitted by internet service providers in response to public notices. Includes language regarding assessing unserved communities for Rural Broadband Access Program eligibility. Under the program, USDA gives priority to unserved communities âcommunities that lack residential broadband service at speeds of at least 10/1 Mbps. Section 6207 directs USDA to coordinate with the FCC and NTIA, obtain data from any other relevant source, and perform site-specific testing to verify that communities given priority are eligible for program funding. Requires loan or grant recipients to report annually to USDA, rather than semiannually as under prior law. The provision also adds reporting requirements for middle mile projects. It directs USDA to submit a single report to Congress each year detailing assistance provided under all USDA rural broadband loan and grant programs. Authorizes not less than 3% and not more than 5% of funding appropriated for certain rural broadband programs be set aside for oversight, reporting, and accountability measures. Section 6210 authorizes recipients of certain RD loans, loan guarantees, or grants authorized by the Rural Electrification Act or the ConAct to use up to 10% of the award amount for rural broadband infrastructure projects . Recipients can use funding only for projects in areas that lack broadband service at speeds of at least 25/3 Mbps. The provision also directs USDA not to provide funding if it would result in competitive harm to another recipient of RD loans or grants. Section 6206 moves language regarding default and deobligation from the section authorizing the Rural Broadband Access Program to a new section of the Rural Electrification Act. It also authorizes USDA to establish a deferral period of not shorter than the project buildout period in order to support the financial feasibility of a project. Section 6209 moves existing language regarding refinancing telecommunications loans to a new section of the Rural Electrification Act and amends this language. Prior law allowed a loan recipient to use any USDA telecommunications loan to refinance another USDA telecommunications loan if refinancing would support broadband deployment in rural areas. The amended language allows a loan recipient to refinance any outstanding loan that would have been used for an eligible telecommunications purpose under the Rural Electrification Act. Sections 6211 and 6502 of P.L. 115-334 amend Section 922 of the Rural Electrification Act, which authorizes USDA to make loans for rural telephone service . Section 6211 authorizes telephone loans to be used to refinance other loans authorized by the Rural Electrification Act. It removes the limit that 40% or less of the telephone loan may be used to refinance other loans. Section 6502 removes the word rural from the section title of the Rural Electrification Act, amending it to read, "Loans for telephone service." Section 6502 also removes the requirement for loan applicants to submit to USDA a certificate of convenience from a state regulatory body. Rural Infrastructure Section 6403 amends the Water and Wastewater Revolving Loan Fund Program . It increases the maximum project award amount from $100,000 to $200,000 and decreases the authorization of annual appropriations from $30 million to $15 million per year for FY2019-FY2023. Section 6404 amends the Rural Water and Wastewater Technical Assistance Program . It increases the authorization of annual appropriations to between 3%-5% of annual appropriations for Water and Waste Disposal Grants, as opposed to 1%-3% under prior law. It also amends eligible projects to include addressing the long-term sustainability of water and wastewater systems and contamination of drinking and surface water. Section 6405 reauthorizes the Rural Water and Wastewater Circuit Rider Program. It also increases the authorization of annual appropriations from $20 million to $25 million per year for FY2019-FY2023. Section 6408 reauthorizes grants for water systems for rural and Native villages in Alaska . It amends the eligible grant recipients to include Native villages, as defined in the Alaska Native Claims Settlement Act, and consortiums formed pursuant to the Department of Interior and Related Agencies Appropriations Act, 1998 ( P.L. 105-83 ). Section 6408 authorizes USDA to set aside up to 2% of annual program funds for consortiums to provide training and technical assistance for water and waste disposal operation and management. Section 6409 reauthorizes and amends the Household Well Water Systems Grant Program . It also authorizes subgrants, as well as previously authorized subloans. It limits subloans and subgrants to a maximum of $15,000 for each water well system or decentralized wastewater system. Section 6409 amends the definition of eligible individual to include one whose household incomes does not exceed 60% of the median nonmetropolitan household income for the state or territory. It also increases the authorization of annual appropriations from $5 million to $20 million per year for FY2019-FY2023. Section 6407 reauthorizes the Emergency and Imminent Community Water Assistance Grant Program . The law funds this program through both a set-aside of Rural Water and Wastewater Grant funding and a standalone appropriation. Section 6407 increases the set-aside from 3%-5% to 5%-7% of annual Rural Water and Wastewater Grant funding. It also increases the authorization for the standalone appropriation from $35 million to $50 million per year for FY2019-FY2023. This provision also directs USDA to prioritize projects that address water contamination posing a threat to human health or the environment. It increases the maximum grant amount from $500,000 to $1 million for projects that respond to a significant decline in water quality or quantity. Section 6407 also establishes an Interagency Task Force on Rural Water Quality to examine drinking water and surface water contamination in rural communities, particularly those in close proximity to active or decommissioned military installations in the United States. The task force must be composed of representatives from certain federal agencies and state and community stakeholders. The task force is to submit a report to relevant committees and make recommendations to address water contamination issues. Section 6303 amends the Rural Energy Savings Program to authorize financing of off-grid and renewable energy storage systems. It also directs USDA to streamline borrower accounting requirements and to publish an annual report on the program. It increases the maximum interest rate for program loans from 3% to 5%. It also directs USDA to exclude any debt incurred under the program in the calculation of a borrower's eligibility for other loans made under the Rural Electrification Act. The provision also reauthorizes annual appropriations of $75 million per year for FY2019-FY2023. Section 6501 authorizes USDA to refinance electric and telephone loans made by RUS. It also directs USDA to enter into a memorandum of understanding with the Department of Energy, under which the Department of Energy will provide technical assistance to USDA on making electric and telephone loans. Section 6505 reauthorizes USDA's ability to guarantee payments on bonds and notes issued for electrification or telephone purposes . It amends the purpose of bond or note guarantees to be for financing utility infrastructure. It also adds terms for bond or note guarantees, including a 30-year maximum length. Section 6505 removes the prohibition on guarantees for bonds or notes that will finance electricity generation. It also directs USDA to continue carrying out specified sections of the Rural Electrification Act until the full implementation of any new regulations required by the 2018 farm bill. Section 6506 reauthorizes the use of certain telecommunications loans for expansion of 911 access . It also amends the eligible loan purposes to include multiuse emergency communications networks that provide critical transportation-related information services. Section 6507 authorizes USDA to make or guarantee electric loans for cybersecurity and grid security improvements . Section 6418 authorizes USDA to collect loan fees for certain loans authorized by the ConAct in such amounts as to bring down the costs of loan subsidies. It also specifies that loan fees shall be consistent with current practices in the marketplace and shall not act as a barrier to participation in the loan programs. The 2018 farm bill also reauthorizes additional programs through FY2023. Section 6406 reauthorizes Tribal College and University Essential Community Facilities Grants, Section 6410 reauthorizes Solid Waste Management Grants, and Section 6412 reauthorizes grants for National Oceanic and Atmospheric Administration Weather Radio Transmitters. Business and Community Development Section 6422 reauthorizes the Rural Microentrepreneur Assistance Program through FY2023. It eliminates mandatory funding for the program (previously $3 million per year) and decreases the authorization of appropriations from $40 million to $20 million per year for FY2019-FY2023. It also adds a minimum grant amount of 20% of the total outstanding balance of microloans made by the intermediary, subject to availability of funding. Section 6412 reauthorizes the Rural Cooperative Development Grant Program through FY2023. It also directs academic institutions conducting research under the program to include economic census data in their research on the economic impacts of cooperatives. Section 6427 reauthorizes appropriations of $20 million per year for the Rural Business Investment Program through FY2023. Section 6426 amends the program by revising the definitions of development venture capital and equity capital . The provision also removes the $500 maximum amount for fees, replacing it with language authorizing USDA to charge "such fees as the Secretary [of Agriculture] considers appropriate, so long as those fees are proportionally equal for each rural business investment company." It also prohibits rural business investment companies from investing in entities that are not otherwise eligible for Farm Credit System financing if a Farm Credit System institution holds more than 50% of the shares of the investment company. Under prior law, this threshold was 25%. Section 6426 also prohibits USDA from requiring that an entity applying to be a rural business investment company provide investment or capital beyond the requirements listed in statute. Section 6416 reauthorizes appropriations of $25 million per year through FY2023 for the Intermediary Relending Program . The provision also sets a maximum loan amount that an intermediary may make for a project at the lesser of $400,000 or 50% of the loan made by USDA to the intermediary. It adds criteria for evaluating applications, directs USDA to establish a schedule for the return of equity contributions, and directs USDA to reduce the administrative requirements on intermediaries. Section 6503 amends the Cushion of Credit Program to terminate all deposit authority into cushion of credit accounts effective December 20, 2018. It reduces the interest rate for borrowers from 5% per year to 4% per year for FY2021 and then to the applicable one-year Treasury rate thereafter. The provision allows a borrower to reduce the cushion of credit account balance in order to prepay loans made or guaranteed under the Rural Electrification Act. Borrowers may make these prepayments through September 2020. The provision prohibits collection of prepayment premiums from borrowers. Section 6503 also authorizes such sums as necessary from the U.S. Treasury to cover any loan modification costs. Section 6504 reauthorizes and amends the Rural Economic Development Loan and Grant Program . It moves language regarding the program from the section of the Rural Electrification Act authorizing the Cushion of Credit Program to a new section of the act. Section 6504 authorizes annual appropriations of $10 million per year for FY2019-FY2023. It also provides for mandatory funding, financed through the Commodity Credit Corporation, of $5 million per year for FY2022 and FY2023. Section 12608 reauthorizes the Rural Emergency Medical Service Training and Equipment Assistance Program and authorizes annual appropriations of such sums as necessary for FY2019-FY2023. It amends eligibility to include only emergency medical service agencies operated by a local or tribal government and tax-exempt emergency medical services agencies. It also amends eligible grant activities to include public education concerning first aid, illness prevention, and emergency preparedness. The provision amends prioritization criteria and decreases the matching requirement for grants from 25% to 10% of the grant amount. It also amends the definition of emergency medical services to include medical care delivered outside of a medical facility under emergency conditions resulting from a natural disaster. The 2018 farm bill also reauthorizes the following programs through FY2023. Section 6411 reauthorizes Rural Business Development Grants, Section 6413 reauthorizes Loans for Locally or Regionally Produced Agricultural Food Products, Section 6414 reauthorizes the Appropriate Technology Transfer for Rural Areas Program, and Section 6423 reauthorizes Delta Health Care Services Grants. Definition of Rural The 2018 farm bill includes three provisions that amend the definition of rural for certain RD programs. USDA uses population thresholds to determine whether an area is rural for the purposes of RD programs. Rural population thresholds vary across RD programs. Section 6301 amends the ConAct to direct USDA to exclude individuals incarcerated on a long-term or regional basis and the first 1,500 individuals residing on a military base when determining whether an area is a rural area for certain RD programs . It also amends the Rural Electrification Act and the Food, Agriculture, Conservation, and Trade Act of 1990 to exclude the same populations when determining whether an area is a rural area for certain RD broadband programs . Section 6305 amends the definition s of rural and rural area in the Housing Act of 1949 . The amended definition allows any area classified as rural or a rural area prior to 1990 to remain so until the next decennial census, if the area has a population between 10,000 and 35,000 and has "a serious lack of mortgage credit for lower and moderate-income families." Section 6402 amends the definition of rural for determining eligibility for guaranteed loans under the Water and Waste Disposal and the Community Facilities programs. It increases the population threshold for guaranteed loans to 50,000 or fewer. Under prior law, the population thresholds were 10,000 or fewer for Water and Waste Disposal Guaranteed Loans and 20,000 or fewer for Community Facilities Guaranteed Loans. Section 6402 also directs USDA to prioritize guaranteed loan applications for areas with a population of 10,000 or fewer for the Water and Waste Disposal Program and 20,000 or fewer for the Community Facilities Program. The population thresholds for grant and direct loan eligibility remain unchanged at 10,000 or fewer for the Water and Waste Disposal Program and 20,000 or fewer for the Community Facilities Program. Regional Development Section 6401 amends the Strategic Economic and Community Development provision of the ConAct. This provision allows USDA to prioritize funding under certain RD programs for projects that support multijurisdictional strategic community development plans. Section 6401 expands the provision to apply to all RD programs as determined by the Secretary of Agriculture. It increases the portion of funding USDA may reserve for projects under this section from 10% to 15% of program funding made available for a fiscal year. Section 6401 also authorizes annual appropriations of $5 million for FY2019-FY2023 for technical assistance to rural communities in developing strategic community investment plans. Sections 6425 and 6304 reauthorize and amend federal regional commissions and authorities. Section 6425 reauthorizes the Delta Regional Authority through October 1, 2023. It also reauthorizes annual appropriations of $30 million per year for the authority for FY2019-FY2023. Section 6304 reauthorizes three federal regional commissions âthe Southeast Crescent Regional Commission, the Southwest Border Regional Commission, and the Northern Border Regional Commissionâand increases authorized appropriations for each commission from $30 million to $33 million per year through FY2023. Federal statute directs the commissions to set aside 40% of grant funding in a given fiscal year for certain eligible activities, including transportation, telecommunications, or other public infrastructure. Section 6304 adds promoting development of renewable and alternative energy sources as an eligible activity for set-aside funding. The 2018 farm bill did not reauthorize the Northern Great Plains Regional Authority . Section 6304 also authorizes a new State Capacity Building Grant Program for the Northern Border Regional Commission . Congress authorizes the commission to provide grants to Maine, New Hampshire, New York, or Vermont for economic development activities. An eligible state must submit to the commission an annual work plan that includes the purpose of the grant. Section 6304 authorizes appropriations of $5 million per year for FY2019-FY2023 for the grant program. Section 6415 reauthorizes the Rural Economic Area Partnership (REAP) Program through FY2023. USDA has established REAP Zones to address critical issues related to economic growth, employment, and isolation. REAP Zones typically consist of multiple counties within a state and receive technical assistance and funding from USDA for strategic planning and community development activities. Section 6420 reauthorizes the National Rural Development Partnership through FY2023. This partnership, coordinated by USDA, includes state rural development councils and a national coordinating committee. State rural development councils facilitate collaboration among local government, private sector, and nonprofit entities in planning and implementing programs related to rural development. The national coordinating committee oversees and provides support for state rural development council activities. Other Provisions Section 12407 amends the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994 ( P.L. 103-354 ) to reestablish the Under Secretary of Agriculture for Rural Development as a permanent position within USDA. USDA eliminated the Under Secretary position in a 2017 reorganization, replacing it with an Assistant to the Secretary for Rural Development who reported directly to the Secretary of Agriculture and was not a Senate-confirmed position. The Under Secretary position reports to the Deputy Secretary of Agriculture and requires Senate confirmation. USDA asserted that the 2017 reorganization "recognizes and promotes the importance of rural development by placing it under the direct oversight of the Secretary." However, some stakeholder organizations opposed eliminating the Under Secretary position. For example, a letter to the House and Senate Agriculture Appropriations subcommittees signed by 578 organizations stated that RD "needs the time and attention of a management team led by an Under Secretary who is empowered to direct and administer rural development programs and field staff." Section 6417 grants the Secretary of Agriculture and the Secretary's designees access to certain information from the Department of Health and Human Services in order to verify income for individuals participating in certain Rural Housing Service programs . Prior law granted the HUD Secretary access to certain information to verify income of participants for certain HUD housing programs. Section 6417 allows the Secretary of Agriculture and the Secretary's designees access to the same information, subject to the same requirements, as the HUD Secretary. Sections 6601 through 6603 repeal certain rural development programs. Section 6602 repeals the Rural Telephone Bank. Section 6603 repeals all sections of the Launching our Communities' Access to Local Television Act of 2000 (Title X of H.R. 5548 , as enacted by Section 1(a)(2) of P.L. 106-553 ) except Section 1008 of the act. Section 6601 of the 2018 farm bill repeals the following programs, which were previously authorized in the ConAct or the Rural Electrification Act: Multijurisdictional regional planning organizations (Section 306(a)(23) of the ConAct), Grants to broadcasting systems (Section 310B(f) of the ConAct), Rural telework organizations (Section 379 of the ConAct), Historical barn preservation (Section 379A of the ConAct), Grants to train farm workers in new technologies and to train farm workers in specialized skills necessary for high-value crops (Section 379C of the ConAct), Grants to the Delta Regional Agricultural Economic Development Program (Section 379D of the ConAct), Grants for expansion of employment opportunities for individuals with disabilities in rural areas (Section 379F of the ConAct), Regional rural collaborative investment program (Subtitle I of the ConAct), Certain electric and telephone loans (Section 314 of the Rural Electrification Act), and The National Center for Rural Telecommunications Assessment (Section 602 of the Rural Electrification Act). Technical Corrections Sections 6701 and 6702 make technical corrections to the ConAct and Rural Electrification Act. Section 6701 amends the ConAct to correct the reference to the definition of Indian tribe for the Community Facilities Loan and Grant Program. It also clarifies the eligible activities for Rural Business Development Grants. Further, Section 6701 amends the ConAct to include Alabama as a participating state in the Delta Regional Authority. Congress initially made this amendment in the Consolidated Appropriations Act, 2001 ( P.L. 106-554 , Â§1(a)(4)). However, the amendment did not take effect at the time because it referred to the incorrect authorizing legislation. Section 6701 of the 2018 farm bill directs the correction to take effect as if included in P.L. 106-554 . Section 6702 corrects misspellings in the Rural Electrification Act. Appendix. Comparison of Rural Development Provisions in Titles VI and XII of the 2018 Farm Bill (P.L. 115-334) with Prior Law


Introduction and Issues for Congress Many U.S. officials and Members of Congress consider Estonia, Latvia, and Lithuania, often referred to collectively as the Baltic states , to be valued U.S. allies and among the most pro-U.S. countries in Europe. Strong ties between the United States and the Baltic states have deep historical roots. Lithuania, Latvia, and Estonia gained their independence in 1918, after the collapse of the Russian Empire. In 1940, they were forcibly incorporated into the Soviet Union, but the United States never recognized their annexation. The United States strongly supported the restoration of the three countries' independence in 1991, and it was a leading advocate of their accession to NATO and the European Union (EU) in 2004. The United States and the Baltic states work closely together in their respective bilateral relationships and within NATO, as well as in the context of U.S.-EU relations. The U.S.-Baltic partnership encompasses diplomatic cooperation in pursuit of shared foreign policy objectives, extensive cooperation on security and defense, and a mutually beneficial economic relationship. The United States provides considerable security assistance to the Baltic states, including financing assistance and defense sales, intended to strengthen their military capabilities. Since 2014, U.S. focus on the Baltic region has increased, driven by concerns about potential threats posed by Russia. Developments related to Russia and the implications for U.S. policy and NATO likely will have continuing relevance for Congress. Estonia, Latvia, and Lithuania are central interlocutors and partners in examining and responding to these challenges. As indicated by annual security assistance appropriations, as well as resolutions and bills adopted or introduced in recent years, Congress supports the maintenance of close relations and security cooperation with the Baltic states. The House Baltic Caucus, a bipartisan group of 70 Members of the House of Representatives, and the Senate Baltic Freedom Caucus, a bipartisan group of 11 Senators, seek to maintain and strengthen the U.S.-Baltic relationship and engage in issues of mutual interest. Domestic Politics Although outside observers typically view Estonia, Latvia, and Lithuania as a group, citizens of the three countries tend to point out that alongside the three countries' many similarities are notable differences in national history, language, and culture. Cooperation and convergence among the Baltic states remains the central trend, but each country has its own unique domestic political dynamics and the viewpoints and priorities of the three countries are not always completely aligned. Estonia, Latvia, and Lithuania stand out as the leaders of democracy among post-Soviet states and are the only post-Soviet states that have joined NATO and the EU. Since the restoration of their independence nearly 30 years ago, the three countries' governments have tended to consist of multiparty coalitions, which have maintained broadly pro-market, pro-U.S./NATO, and pro-EU orientations. Estonia The government of Estonia is led by the center-left Center Party in a coalition with the far-right, anti-immigration Conservative People's Party of Estonia (EKRE) and the conservative Pro Patria (Fatherland) party. Juri Ratas of the Center Party is Estonia's prime minister. The Center Party came in second in Estonia's March 2019 general election with 23.1% of the vote (26 seats in Estonia's 101-seat unicameral parliament, the Riigikogu ); it was able to form a government after it unexpectedly reversed its campaign pledge not to work with the far-right EKRE. EKRE came in third in the election with 17.8% of the vote, more than doubling its share of the vote from the 2015 election and winning 19 seats (a gain of 12 seats). The center-right Reform Party, which led a series of coalition governments from 2005 to 2016, came in first place in the 2019 election, winning 28.9% of the vote (34 seats). However, it was unable to secure enough support from potential coalition partners to form a government. The Center Party, whose support comes largely from Estonia's Russian-speaking population (about 30% of the population), previously led a coalition government with Pro Patria and the center-left Social Democratic Party from November 2016 until the 2019 election. In late 2016, a changeover in the party's leadership reoriented the Center Party away from a Russian-leaning outlook to a clear pro-Western stance in support of Estonia's membership in NATO and the EU. During the 2019 campaign, the Center Party advocated for a progressive tax system, higher social spending, a simplified path to citizenship for noncitizen residents, and maintenance of the country's dual Estonian- and Russian-language education system. The Reform Party, by contrast, advocated maintenance of a flat tax, tight fiscal policy, and Estonian language exams for obtaining citizenship. The Reform Party also called for rolling back Russian-language education in the country's school system. Observers assert that EKRE benefitted in the 2019 election from antiestablishment sentiment among voters and gained support by appealing to rural Estonians who feel economically left behind. In addition to opposing immigration, EKRE is adamantly nationalist, skeptical of the EU, and anti-Russia. Some analysts suggest there is a potential for friction between the Center Party and EKRE on issues such as citizenship, immigration, and abortion policy. In 2016, Estonia's parliament unanimously elected Kersti Kaljulaid as president. Kaljulaid is the country's youngest president (aged 46 at the time of her election) and its first female president. A political outsider with a background as an accountant at the European Court of Auditors, she was put forward as a surprise unity candidate after Estonia's political parties were unable to agree on the first round of candidates. The president serves a five-year term and has largely ceremonial duties but plays a role in defining Estonia's international image and reflecting the country's values. Latvia Latvia's October 2018 general election produced a fragmented result, with seven parties winning seats in the country's 100-seat unicameral parliament ( Saeima ) . After three months of negotiations and deadlock, a five-party coalition government took office in January 2019. Prime Minister KriÅ¡jÄnis KariÅÅ¡ of the center-right New Unity Party (JV) leads the government. JV leveraged its experience as a member of the previous governing coalition to put together and lead the new government despite being the smallest party in the Saeima , with eight seats. The other coalition members are the conservative, nationalist National Alliance (NA) and three new parties: the antiestablishment Who Owns the State? (KPV LV); the New Conservative Party (JKP), which campaigned on an anti-corruption platform; and the liberal Development/For! alliance. The coalition partners hold a combined 61 seats in the Saeima and appear likely to maintain the broadly center-right, fiscally conservative, and pro-European policies followed by recent Latvian governments. At the same time, the strong showings in the election by KPV LV and JKP (each won 16 seats) appeared to reflect deepening public dissatisfaction with corruption and the political establishment following high-profile bribery and money-laundering scandals in 2018. The three parties of the previous coalition government, the centrist Union of Greens and Farmers (ZZS), the Unity Party (rebranded New Unity in 2018), and the NA, lost nearly half their total seats, dropping from a combined 61 seats to 32 seats. The center-left Harmony Social Democratic Party (SDPS), which draws its support largely from the country's ethnic Russian population, remained the largest party in parliament, with 23 seats. With five of the seven parties in the coalition government, the SDPS and ZZS are the parliamentary opposition. The next general election is scheduled to take place in 2022. On May 29, 2019, the Saeima elected Egils Levits to be Latvia's next president. A former judge at the European Court of Justice, Levits formally took office on July 8, 2019. Outgoing President Raimonds Vejonis of the ZZS declined to run for a second term. The president performs a mostly ceremonial role as head of state but also acts as commander-in-chief of the armed forces and has the power to propose and block legislation. Lithuania Lithuania has a centrist coalition government composed of four political parties and led by the center-right Lithuanian Peasants and Greens Union (LVÅ½S). The LVÅ½S emerged as the surprise winner of the country's October 2016 parliamentary election, winning 54 of the 141 seats in the Lithuanian parliament ( Seimas ) after winning one seat in the 2012 election. The prime minister of Lithuania is Saulius Skvernelis, a politically independent former interior minister and police chief who was selected for the position by the LVÅ½S (while remaining independent, Skvernelis campaigned for the LVÅ½S). A major factor in the 2016 election outcome was the perception that Skvernelis and the LVÅ½S remained untainted by a series of corruption scandals that negatively affected support for most of Lithuania's other political parties. The LVÅ½S initially formed a coalition government with the center-left Social Democratic Party of Lithuania (LSDP), which led the previous coalition government following the 2012 election. In September 2017, the LSDP left the coalition amid tensions over the slow pace of tax and pension reforms intended to reduce economic inequality. Prime Minister Skvernelis subsequently led a minority government of the LVÅ½S and the Social Democratic Labour Party of Lithuania (LSDDP), a new party that splintered off from the LSDP. In July 2019, the LVÅ½S and the LSDDP reached an agreement to form a new coalition government with the addition of the nationalist-conservative Order and Justice Party and the Electoral Action of Poles in Lithuania-Christian Families Alliance. The four parties in the current coalition control a parliamentary majority, with a combined 76 out of 141 seats in the Seimas . The coalition's domestic agenda focuses primarily on boosting social programs, including greater spending on social insurance and increased benefits for families, students, and the elderly. The opposition parties are the center-right Homeland Union-Lithuanian Christian Democrats, which came in second place in the 2016 election with 31 seats; the LSDP; and the center-right Liberal Movement. The next general election is scheduled to take place in October 2020. Gitanas NausÄda, a pro-European, politically independent centrist and former banker, won Lithuania's May 2019 presidential election. He replaces Dalia GrybauskaitÄ , who served as president from 2009 to 2019 and was consistently regarded as Lithuania ' s most popular politician. The powers of the Lithuanian presidency, the only presidency in the Baltic states to be directly elected, are weaker than those of the U.S. presidency. However, the Lithuanian president plays an important role in shaping foreign and national security policy, is commander-in-chief of the armed forces, appoints government officials, and has the power to veto legislation. Efforts to combat corruption remain a focus of Lithuania's government. Following a series of bribery scandals involving leading politicians and one of the country's largest companies, the Seimas adopted a new law in 2018 appointing special prosecutors to investigate cases of political corruption. Economic Issues The 2008-2009 global economic crisis hit the Baltic states especially hard; each of the three countries experienced an economic contraction of more than 14% in 2009. The social costs of the recession and the resulting budget austerity included increased poverty rates and income inequality and considerable emigration to wealthier parts of the EU. The Baltic economies have since rebounded, however, benefitting from strong domestic consumption, external demand for exports, and investment growth (including from EU funding): Estonia's gross domestic product (GDP) grew by 5.8% in 2017 and 4.8% in 2018. It is forecast to grow by 3.2% in 2019 and 2.9% in 2020. Unemployment declined from 16.7% in 2010 to 5.4% in 2018. Latvia's GDP grew by 4.6% in 2017 and 4.8% in 2018; it is forecast to grow by 2.8% in 2019 and 2.8% in 2020. Unemployment declined from 19.5% in 2010 to 7.4% in 2018. Lithuania's GDP grew by 4.1% in 2017 and 3.5% in 2018; it is forecast to grow by 3.4% in 2019 and 2.7% in 2020. Unemployment declined from 17.8% in 2010 to 6.1% in 2018. Despite the crisis and aftermath, each of the Baltic states fulfilled a primary economic goal when each adopted the euro as its currency (Estonia in 2011, Latvia in 2014, and Lithuania in 2015). The public finances of the Baltic states remain well within guidelines set by the EU (which require member states to have an annual budget deficit of less than 3% of GDP and maintain government debt below 60% of GDP). Both Estonia and Latvia recorded a budget deficit below 1% of GDP in 2018, and Lithuania had a small budget surplus. Gross government debt in 2018 was approximately 8.3% of GDP for Estonia (making it the EU's least-indebted member state), 35.9% of GDP for Latvia, and 34.2% of GDP for Lithuania. According to a study by the European Commission, foreign direct investment (FDI) in the Baltic states remains below precrisis levels. With considerable investment in the financial services sector, Sweden is the largest foreign investor in the region, followed by Finland and the Netherlands. Estonia has been the most successful of the three Baltic countries in attracting FDI, with FDI equivalent to approximately 100% of gross value added in 2015, compared to approximately 63% for Latvia and 40% for Lithuania. Banking Sector Concerns U.S. and European authorities have expressed concerns about the practices of banks in the region that cater to nonresidents, largely serving account holders based in Russia and other countries of the former Soviet Union. In 2018, two scandals in particular brought attention to money-laundering challenges in the region. In February 2018, the U.S. Department of the Treasury designated ABLV Bank, then the third-largest bank in Latvia, as a financial institution of primary money laundering concern. Treasury accused it of money laundering, bribery, and facilitating transactions violating United Nations sanctions against North Korea. Following a run on deposits and a decision by the European Central Bank not to intervene, ABLV initiated a process of self-liquidation. The Latvian government subsequently made reforming the banking sector and strengthening anti-money-laundering (AML) practices top policy priorities. A September 2018 report commissioned by Danske Bank, Denmark's largest bank, indicated that between 2007 and 2015, some â¬200 billion (approximately $220 billion) worth of suspicious transactions may have flowed through a segment of its Estonian branch catering to nonresidents, primarily Russians. The activity continued despite critical reports by regulatory authorities and whistleblower accounts highlighting numerous failures in applying AML practices. In February 2019, the Estonian Financial Supervision Authority ordered Danske Bank to cease operations in Estonia; Danske Bank subsequently decided to cease its activities in Latvia and Lithuania (and Russia), as well. Regional Relations with the United States The U.S. State Department describes Estonia, Latvia, and Lithuania as strong, effective, reliable, and valued allies that have helped to promote security, stability, democracy, and prosperity in Europe and beyond. Many citizens of the Baltic states remain grateful to the United States for consistently supporting their independence throughout the Cold War and playing a key role in promoting the restoration of independence in 1991. Most policymakers in the Baltic states tend to see their countries' relationship with the United States as the ultimate guarantor of their security against pressure or possible threats from Russia. All three Baltic states joined NATO and the EU in 2004 with strong U.S. support. In addition to maintaining a pro-NATO and pro-EU orientation, the Baltic states have sought to support U.S. foreign policy and security goals. For example, they have worked closely with the United States in Afghanistan, where the three Baltic states have contributed troops to NATO-led missions since 2002-2003. The three countries also have been partner countries in the Global Coalition to Defeat the Islamic State, providing personnel, training, weapons, and funding for efforts to counter the Islamic State in Iraq and Syria since 2014. The Trump Administration and many Members of Congress have demonstrated support for strong U.S. relations with the Baltic states. In April 2018, President Donald Trump hosted the presidents of the three Baltic states for a quadrilateral U.S.-Baltic Summit intended to deepen security and defense cooperation and reaffirm the U.S. commitment to the region. The presidential summit was followed by a U.S.-Baltic Business Summit intended to expand commercial and economic ties. During the 115 th Congress, the Senate adopted a resolution ( S.Res. 432 ) congratulating Estonia, Latvia, and Lithuania on the 100 th anniversary of their independence; applauding the U.S.-Baltic partnership; commending the Baltic states' commitment to NATO, transatlantic security, democracy, and human rights; and reiterating the Senate's support for the European Deterrence Initiative (EDI) as a means of enhancing Baltic security (on EDI, see " U.S. European Deterrence Initiative ," below). Security Partnership and Assistance The United States provides significant security assistance to its Baltic partners. According to the State Department, as of July 2019, U.S. security assistance to the Baltic states has included more than $450 million in defense articles sold under the Foreign Military Sales (FMS) program and more than $350 million in defense articles authorized under the Direct Commercial Sales process since 2014; more than $150 million in Foreign Military Financing (FMF) since 2015, with the aim of strengthening the Baltic states' defensive capabilities in areas such as hybrid warfare, electronic warfare, border security, and air and maritime domain awareness and enhancing interoperability with NATO forces; approximately $1.2 million annually per country in International Military Education and Training (IMET) funds contributing to the professional education of military officers; and $290 million in funding from the Department of Defense under Title 10 train and equip programs since 2015, including approximately $173 million in FY2018. Since 1993, the Baltic states have participated in the U.S. National Guard State Partnership Program. Under the program, Estonia's armed forces partner with units from the Maryland National Guard, Latvia's armed forces partner with the Michigan National Guard, and Lithuania's armed forces partner with the Pennsylvania National Guard. In 2017, the United States signed separate bilateral defense cooperation agreements with each of the Baltic states. The agreements enhanced defense cooperation by building on the NATO Status of Forces Agreement to provide a more specific legal framework for the in-country presence and activities of U.S. military personnel. The National Defense Authorization Act for Fiscal Year 2018 ( P.L. 115-91 ) authorized the Department of Defense to conduct or support a security assistance program to improve the Baltic states' interoperability and build their capacity to deter and resist aggression. The program was authorized through 2020 with a spending limit of $100 million. In November 2018, the United States and the three Baltic states agreed to develop bilateral defense cooperation strategic road maps focusing on specific areas of security cooperation for the period 2019-2024. In April 2019, the United States and Lithuania signed a road map agreeing to strengthen cooperation in training, exercises, and multilateral operations; improve maritime domain awareness in the Baltic Sea; improve regional intelligence-sharing, surveillance, and early warning capabilities; and build cybersecurity capabilities. In May 2019, the United States signed road map agreements with Latvia and Estonia outlining similar priorities for security cooperation. In the 116 th Congress, the National Defense Authorization Act for Fiscal Year 2020 ( P.L. 116-92 ) extended security assistance to the Baltic states for building interoperability and deterrence through 2021 and increased the total spending limit to $125 million. The act also requires the Secretary of Defense and the Secretary of State to jointly conduct a comprehensive assessment of the military requirements necessary to deter and resist Russian aggression in the region. The committee report ( S.Rept. 116-103 ) for the Senate version of the Department of Defense Appropriations Act, 2020 ( S. 2474 ), recommends allocating $400 million to the Defense Cooperation Security Agency to fund a Baltics regional air defense radar system. A sense of Congress resolution introduced in the House of Representatives ( H.Res. 416 ) would reaffirm U.S. support for the Baltic states' sovereignty and territorial integrity and encourage the Administration to further defense cooperation efforts. Partially reflected in the National Defense Authorization Act for Fiscal Year 2020, the Baltic Reassurance Act ( H.R. 3064 ) introduced in the House of Representatives would reiterate the U.S. commitment to the security of the Baltic states and require the Secretary of Defense to conduct a comprehensive regional defense assessment. Economic Relations U.S. economic ties with the three Baltic states remain relatively limited, although the State Department has stated there are "growing commercial opportunities for U.S. businesses" and "room for growth" in the relationship. In 2018, U.S. goods exports to Estonia were valued at $346.1 million and goods imports from Estonia were valued at $953.5 million. Main U.S. exports to Estonia are computer and electronic products, chemicals, machinery, and transportation equipment; Estonia's top exports to the United States are computer and electronic products, petroleum products and chemicals, electrical equipment, and medical instruments. U.S. affiliates employ about 3,570 people in Estonia, and U.S. FDI in Estonia was about $100 million in 2017. In 2018, U.S. goods exports to Latvia were valued at $510.4 million and goods imports from Latvia were valued at $727.1 million. Main U.S. exports to Latvia are transportation equipment and computer and electronic products; top U.S. imports from Latvia are beverage products and transportation equipment. U.S. affiliates employ about 1,325 people in Latvia, and U.S. FDI in Latvia was $71 million in 2017. In 2018, U.S. exports to Lithuania were valued at $706.4 million and imports from Lithuania were valued at nearly $1.268 billion. Main U.S. exports to Lithuania are used machinery, chemicals, computer and electronic products, and transportation equipment; top U.S. imports from Lithuania are petroleum and coal products, chemicals, and furniture. U.S. affiliates employ about 2,250 people in Lithuania, and Lithuania has not attracted significant levels of U.S. FDI. Regional Security Concerns and Responses Officials in the Baltic region have noted with concern what they view as increasing signs of Russian foreign policy assertiveness. These signs include a buildup of Russian forces in the region, large-scale military exercises, and incursions by Russian military aircraft into Baltic states' airspace. Unlike Georgia and Ukraine, the Baltic states are members of NATO, and many observers contend the alliance's Article 5 collective defense guarantee limits potential Russian aggression in the Baltic region. Nevertheless, imposing various kinds of pressure on the Baltic states enables Russia to test NATO solidarity and credibility. Defense experts assert that Russian forces stationed near the Baltic region, including surface ships, submarines, and advanced S-400 air defense systems, could "allow [Russia] to effectively close off the Baltic Sea and skies to NATO reinforcements." According to a RAND report based on a series of war games staged in 2014 and 2015, a quick Russian strike could reach the capitals of Estonia and Latvia in 36-60 hours. Defense Spending and Capabilities The breakup of the Soviet Union left the Baltic states with virtually no national militaries, and their forces remain small and limited (see Table 1 ). The Baltic states' defense planning consequently relies heavily on NATO membership, and these states have emphasized active participation in the alliance through measures such as contributing troops to NATO's mission in Afghanistan. In the context of Russia's invasion of Ukraine and renewed concerns about Russia, the Baltic states have significantly increased their defense budgets and sought to acquire new military capabilities. Lithuania has the largest military of the three Baltic states, with 19,850 total active duty personnel in 2019. According to NATO, Lithuania has increased its defense spending from $427 million in 2014 to an expected $1.084 billion in 2019, equivalent to 1.98% of GDP (NATO recommends that member states allocate 2% of GDP for defense spending). The defense ministry has moved ahead with plans to acquire new self-propelled artillery systems and portable anti-aircraft missiles, as well as elements of a medium-range air defense system. After abolishing conscription in 2008, Lithuania reintroduced compulsory military service in 2015 due to concerns about Russia, a move that brings 3,000 personnel to the armed forces per year. According to NATO, Estonia's defense spending is expected to be 2.13% of GDP ($669 million) in 2019. The country's armed forces total 6,600 active personnel and 12,000 reserves, plus a volunteer territorial defense force with about 15,800 members. Estonia has taken steps to upgrade its air defense system and modernize a range of ground warfare equipment, including anti-tank weapons. Estonia has compulsory military service for men aged 18-27, with an eight-month basic term of conscripted service. Latvia's armed forces total 6,210 active personnel. According to NATO figures, Latvia has more than doubled its defense spending as a percentage of GDP over the past five years, from 0.94% of GDP in 2014 to 2.01% of GDP ($724 million) in 2019. Acquisition priorities of the Latvian armed forces include self-propelled artillery, armored reconnaissance vehicles, multi-role helicopters, anti-aircraft missiles, and anti-tank missiles. U.S. European Deterrence Initiative Under the European Deterrence Initiative (EDI), which was launched in 2014 and originally called the European Reassurance Initiative, the United States has bolstered security cooperation in Central and Eastern Europe with enhanced U.S. military activities in five areas: (1) increased military presence in Europe, (2) additional exercises and training with allies and partners, (3) improved infrastructure to allow greater responsiveness, (4) enhanced prepositioning of U.S. equipment, and (5) intensified efforts to build partner capacity of newer NATO members and other partners. As of December 2019, there are approximately 6,000 U.S. military personnel involved in the associated Atlantic Resolve mission at any given time, with units typically operating in the region under a rotational nine-month deployment. The United States has not increased its permanent troop presence in Europe (about 67,000 troops, including two U.S. Army Brigade Combat Teams, or BCTs). Instead, it has focused on rotating additional forces into the region, including nine-month deployments of a third BCT based in the United States. The rotational BCT is based largely in Poland, with units also conducting training and exercises in the Baltic states and 14 other European countries. The Fourth Infantry Division Mission Command Element, based in PoznaÅ, Poland, acts as the headquarters overseeing rotational units. EDI funding increased substantially during the first years of the Trump Administration, from approximately $3.4 billion in FY2017 to approximately $4.8 billion in FY2018 and approximately $6.5 billion in FY2019. For FY2020, the Administration requested $5.9 billion in funding for the EDI; defense officials explained that the reduced request was due to the completion of construction and infrastructure projects. In September 2019, the Department of Defense announced plans to defer $3.6 billion of funding for 127 military construction projects in order to fund construction of the U.S.-Mexico border wall, with approximately $770 million of this money to come from EDI-related projects. Affected initiatives in the Baltic states reportedly include the planned construction of a special forces operations and training facility in Estonia. NATO Enhanced Forward Presence At the 2016 NATO Summit in Warsaw, the alliance agreed to deploy battalion-sized (approximately 1,100-1,500 troops) multinational battle groups to Poland and each of the three Baltic states (see Figure 2 ). These enhanced forward presence units are intended to deter Russian aggression and emphasize NATO's commitment to collective defense by acting as a tripwire that ensures a response from the whole of the alliance in the event of a Russian attack. Germany leads the multinational battalion in Lithuania, with troop contributions from Belgium, the Czech Republic, Iceland, the Netherlands, and Norway. Canada leads the multinational battalion in Latvia, with troop contributions from Albania, the Czech Republic, Italy, Montenegro, Poland, Slovakia, Slovenia, and Spain. The United Kingdom (UK) leads in Estonia, with contributions from Denmark, France, and Iceland. (The United States leads the multinational battalion in Poland, with contributions from Croatia, Romania, and the UK. ) NATO continues to resist calls to deploy troops permanently in countries that joined the alliance after the collapse of the Soviet Union due to concerns in some member states that doing so could violate the terms of the 1997 NATO-Russia Founding Act. Accordingly, the enhanced NATO presence has been referred to as continuous but rotational rather than permanent . NATO Air Policing Mission Lacking their own fighter aircraft, the Baltic states rely on their NATO allies to police and defend Baltic airspace. NATO launched the Baltic Air Policing mission in 2004. The mission originally consisted of rotating four-month deployments of four aircraft. Following Russia's invasion of Ukraine in 2014, deployments increased to 8 to 12 aircraft at a time. The Baltic states contribute to mission costs, including by providing ground services for the aircraft and supplying aviation fuel. In September 2019, Belgium took over as the air-policing mission's lead nation, with four Belgian and four Danish F-16s operating from Å iauliai Air Base in Lithuania, augmented by four Czech Gripen fighters based at Ãmari Air Base in Estonia. From May to August 2019, in what was the 50 th rotation of the Baltic Air Policing mission, Hungary was the lead nation, with Hungarian Gripens joined at Å iauliai by F-18s from Spain and British Eurofighters augmenting from Ãmari. Potential Hybrid Threats In recent years, tensions between Russia and the Baltic states have been exacerbated by reciprocal accusations of spying; illicit cyber activity, including the hacking of Baltic states' government websites; and a Russian propaganda offensive directed at Russian speakers in the Baltic states. Baltic states' support for EU sanctions on Russia due to its invasion of Ukraine also has exacerbated tensions, as have Russian retaliatory sanctions targeting agricultural products. Many observers have expressed concerns about Russia targeting the Baltic states with hybrid warfare tactics, such as those it has used in Ukraine. Disinformation Campaigns and Ethnic Russians in Baltic States The presence of a large ethnic Russian population in the Baltic states is a factor in these concerns, especially given that Russian claims of persecution against Russian communities were part of Russia's pretext for intervention in Ukraine. According to statements by Russian officials, including President Vladimir Putin, one of the central principles of Russian foreign policy is acting as the defender and guarantor of the rights of Russian-speaking people wherever they live. Russia routinely accuses Estonia and Latvia of violating the human rights of Russian-speaking minorities by discriminating against the Russian language in official usage. Although international organizations generally have rejected these charges, some segments of the countries' Russian-speaking communities are poorly integrated into society. About 230,000 people in Latvia and 76,000 people in Estonia, the majority of whom are ethnic Russians, are noncitizen residents who are not allowed to vote or hold public office because they have not passed a citizenship test, which includes language and history components. Additionally, approximately 55,000 Russian citizens live in Latvia and 89,000 Russian citizens live in Estonia. Many in the ethnic Russian community receive their news primarily from Russian-language television and newspapers, and Russian media dominates the information market in Russian-speaking regions. In the past, Latvia and Lithuania have imposed fines and temporary bans on Russian media outlets, such as Rossiya and Sputnik , due to what authorities considered dangerous and unbalanced reporting. Analysts have documented how Russia uses traditional media (e.g., radio, television) and social media to propagate disinformation in the Baltic states and many other European countries. Russian disinformation efforts against the Baltic states typically attempt to polarize society by portraying the Baltic states as illegitimate and dysfunctional, the EU as ineffective and divided, NATO and the United States as imperial powers, and Baltic governments as Russophobe fascist regimes that oppress their ethnic Russian populations. Russian outlets repeatedly have sought to stir up opposition to NATO deployments in the region by fabricating stories of criminal activity by deployed NATO soldiers. There is no movement among Russian-speaking communities in the Baltic states advocating absorption by Russia, and survey data indicate that these communities are not a unified, homogenous group in terms of how they view competing political narratives. Analysts believe most members of these communities prefer to live in Estonia or Latvia rather than Russia; noncitizen residents enjoy benefits such as visa-free travel throughout the EU, and average wages are considerably higher than in Russia. Concerns remain, however, that Russia could attempt to foment tensions or civil unrest as a pretext for intervention or in an attempt to seize territory populated by ethnic Russians. Cyberattacks Vulnerability to potential cyberattacks is a primary concern for the Baltic states. Following a period of heightened tensions with Russia in 2007, Estonia's internet infrastructure came under heavy attack from hackers. Estonian officials said some assaults came from Russian government web servers, although many others came from all over the world. According to analysts, what appeared as a series of smaller, individual distributed denial-of-service attacks was most likely a coordinated, large-scale effort. The attacks did little long-term damage, and they gave Estonia experience in facing such incidents and prompted the country to strengthen its cyber defenses. Estonia hosts the NATO Cooperative Cyber Defense Center of Excellence, which opened in 2008. The center fosters cooperation and information sharing on cybersecurity between NATO countries, conducts cyberwarfare research and training, and organizes exercises and conferences preparing NATO countries to detect and fight cyberattacks. In 2018, Lithuania adopted a national Cyber Security Strategy and integrated several government agencies into the National Cyber Security Centre (NCSC) under the Ministry of Defense. Lithuania's NCSC registered more than 53,000 cybersecurity incidents in 2018. The International Telecommunication Union's Global Cybersecurity Index 2018 ranked Lithuania fourth and Estonia fifth in the world based on measurements of legal, technical, organizational, capacity building, and cooperation measures related to cybersecurity. (The UK was ranked first, United States second, and France third. ) Energy Security In 2014, a decade after joining NATO and the EU, the Baltic states continued to import 100% of their natural gas from Russia. This dependence raised concerns that Russia could use energy as political and economic leverage against the Baltic states, prompting them to diversify their supply sources and improve their integration with European natural gas networks. In 2014, a floating liquefied natural gas (LNG) terminal became operational at the Lithuanian port of KlaipÄda. The nearly 300-meter-long vessel, the Independence , has the capacity to supply 100% of Lithuania's natural gas needs and 90% of the total natural gas needs of the three Baltic countries combined. In 2014, the Lithuanian gas company Litgas signed a five-year deal with Norway's Statoil (now Equinor) to provide 540 million cubic meters of gas to the facility annually. Gazprom subsequently agreed to cut the price Lithuania pays for natural gas. The United States began exporting LNG to Lithuania in 2017. Currently, Lithuania imports nearly 58% of its natural gas from Russia, accounting for approximately 19% of its primary energy consumption. Although Estonia and Latvia continue to import all of their natural gas from Russia, natural gas accounts for a relatively low share of the countries' overall energy supplies. Oil shale accounts for about 85% of Estonia's domestic energy supply, whereas natural gas accounts for less than 6%. Russian natural gas accounts for approximately 24% of Latvia's primary energy consumption; hydropower is Latvia's largest source of energy. In addition to Lithuania's LNG facility, numerous initiatives aim to reduce regional energy dependence on Russia through supply diversification and increased interconnectivity. A pipeline from Poland to Lithuania, linking the natural gas networks of the Baltic states to the rest of the EU, is expected to be completed in 2021. The Baltic Connector pipeline linking the gas infrastructures of Estonia and Finland is expected to become operational in 2020. Poland opened an LNG terminal in 2015, and Finland opened one in 2019. As a remnant of the Soviet era, the Baltic states' power grids remain connected and synchronized with those of Russia (including Kaliningrad) and Belarus; a control center in Moscow regulates frequency and manages reserve capacity for the Baltic states' electricity supply. Two strategic projects to integrate the region's power grid into the wider European electricity market became operational in 2016: the LitPol link connecting Lithuania with Poland and the 450-kilometer undersea NordBalt cable connecting Lithuania with Sweden. Previously, two connections between Estonia and Finland were the only infrastructure linking the region's electric grid to the rest of Europe. In 2018, the governments of Estonia, Latvia, and Lithuania reached an agreement with the European Commission on plans to synchronize their electricity grids with the rest of Europe by 2025. Many U.S. officials and Members of Congress regard European energy security as a U.S. interest. In particular, there has been concern in the United States that Russian energy dominance could affect the ability to present a united transatlantic position when it comes to other issues related to Russia. Successive U.S. Administrations have encouraged EU member states to reduce energy dependence on Russia through diversification of supply. They also have supported European steps to develop alternative sources and increase energy efficiency. In the 116 th Congress, related bills include the European Energy Security and Diversification Act of 2019 (House-passed H.R. 1616 and S. 704 ), the Protect European Energy Security Act ( H.R. 2023 ), and the Energy Security Cooperation with Allied Partners in Europe Act of 2019 ( S. 1830 ). Conclusion The Baltic states are likely to remain strong U.S. allies and important U.S. security partners in Europe. Analysts believe close cooperation between the United States and the Baltic states will continue for the foreseeable future in areas such as efforts to deter potential Russian aggression, the future of NATO, energy security, and economic issues. The Baltic states likely will continue to look to the United States for leadership on foreign policy and security issues. During the 116 th Congress, the activities and funding level of the EDI, bilateral security cooperation with the Baltic states, and the regional presence and activities of NATO forces may remain of interest to Members of Congress. Efforts to bolster the capabilities of the Baltic states' armed forces, including through defense sales and the provision of U.S. security assistance, also may be of congressional interest. The Baltic states likely will be of continuing importance in the area of European energy security. In addition, Members of Congress may wish to remain informed about potential security threats to the Baltic states posed by Russia, including conventional military concerns and hybrid threats, such as disinformation campaigns and cyberattacks. Members of Congress may have an interest in assessing how the Baltic states, as well as other NATO and EU member states, can develop capabilities to counter such hybrid threats.