T he Gulf of Mexico Energy Security Act of 2006 (GOMESA) altered federal offshore oil and gas leasing policy in the U.S. Gulf of Mexico. The law imposed an oil and gas leasing moratorium through June 30, 2022, throughout most of the Eastern Gulf of Mexico (off the Florida coast) and a small part of the Central Gulf. In other parts of the Gulf of Mexico, the law established a framework for sharing revenues from certain qualified oil and gas leases with the "Gulf producing states" of Alabama, Louisiana, Mississippi, and Texas, as well as with a nationwide outdoor recreation programâthe Land and Water Conservation Fund's (LWCF's) state assistance program. Several aspects of GOMESA have generated interest in the 116 th Congress. As the 2022 expiration date for the leasing moratorium in the Eastern Gulf approaches, the Department of the Interior's (DOI's) Bureau of Ocean Energy Management (BOEM) has begun to plan for offshore leasing in this area following the moratorium's expiration. BOEM's draft proposed five-year oil and gas leasing program for 2019-2024 would schedule new lease sales in the expired moratorium area starting in 2023. Some Members of Congress seek to forestall new lease sales by extending the moratorium beyond 2022; others support allowing it to expire on the currently scheduled date. On September 11, 2019, the House passed H.R. 205 , which would make the GOMESA moratorium permanent. Congress is weighing the potential for development of hydrocarbon resources in the Eastern Gulf against competing uses of the area for military testing and training, commercial fishing, and recreation. The debate encompasses questions of regional economic livelihoods and national energy and military security, as well as environmental concerns centered on the threat of oil spills and the potential contributions to climate change of oil and gas development. GOMESA's revenue-sharing provisions also have generated debate and interest in the 116 th Congress. The law entered a second revenue-sharing phase in FY2017âoften referred to as GOMESA's "Phase II"âin which qualified leasing revenues from an expanded geographic area are shared with the states and with the LWCF. Phase II has resulted in higher revenue shares than in the law's first decade (FY2007-FY2016). Revenue sharing from the added Phase II areas is capped for most years at $500 million annually for the Gulf producing states and the LWCF combined, and some Members of Congress seek to raise or eliminate this cap. In the 115 th Congress, P.L. 115-97 increased the cap to $650 million for FY2020 and FY2021. In addition to changing the cap, some Members have advocated to increase the percentage of revenues shared with the Gulf Coast states and to increase the set of qualified leases from which revenues can be shared, as well as to add an additional state (Florida) to the revenue-sharing arrangement. Other bills have proposed new uses of Gulf oil and gas revenues for various federal programs and purposes outside of revenue sharing, and some stakeholders have proposed to end GOMESA state revenue sharing altogether. Debate has centered on the extent to which these revenues should be shared with coastal states versus used for broader federal purposes, such as deficit reduction or nationwide federal conservation programs. Some Members of Congress and other stakeholders have made the case that the coastal states should receive a higher revenue share, given costs incurred by these states and localities to support extraction activities. These stakeholders have compared GOMESA revenue sharing with the onshore federal revenue-sharing program, where states receive a higher share of the federal leasing revenues than is provided under the GOMESA framework. Other Members of Congress, as well as the Obama and Trump Administrations at times, have contended that revenues generated in federal waters belong to all Americans, and revenue distribution should reflect broader national needs. This report provides brief background on Gulf of Mexico oil and gas development, discusses key provisions of GOMESA, and explores issues related to the Eastern Gulf moratorium and Gulf state revenue sharing. The report discusses various legislative options and proposals for amending GOMESA, as well as scenarios for future leasing if the law continues unchanged. Background The Gulf of Mexico has the most mature oil and gas development infrastructure on the U.S. outer continental shelf (OCS), and almost all U.S. offshore oil and gas production (approximately 98%) takes place in this region. Additionally, the Gulf contains the highest levels of undiscovered, technically recoverable oil and gas resources of any U.S. OCS region, according to BOEM. The Office of Natural Resources Revenue (ONRR) estimated federal revenues from offshore oil and gas leases in the Gulf at $5.51 billion for FY2019, out of a total of $5.57 billion for all OCS areas ( Table 1 ). From FY2009 to FY2018, annual revenues from federal leases in the Gulf ranged from a high of $8.74 billion in FY2013 (out of $9.07 billion total OCS oil and gas revenues for that year) to a low of $2.76 billion in FY2016 (out of $2.79 billion total OCS oil and gas revenues for that year). Changing prices for oil and gas are the most significant factors in these revenue swings. BOEM divides the Gulf into three planning areas: Eastern, Central, and Western. Most of the oil and gas development has taken place in the Central and Western Gulf planning areas. This is due to stronger oil and gas resources in those areas (as compared with the Eastern Gulf) and to leasing restrictions in the Eastern Gulf imposed by statutes and executive orders before GOMESA's enactment. Eastern Gulf Leasing Prohibitions Prior to GOMESA Congressional leasing restrictions in some parts of the Eastern Gulf date from the 1980s. Prompted by concerns of some coastal states, fishing groups, and environmentalists, Congress mandated a series of leasing moratoria in certain parts of the OCS, which grew to include the Eastern Gulf of Mexico. The FY1984 Interior Appropriations Act prohibited leasing in any Eastern Gulf areas within 30 nautical miles of the baseline of the territorial sea and in other specified Eastern Gulf blocks. From FY1989 through FY2008, the annual Interior appropriations laws consistently included moratoria in the portion of the Eastern Gulf south of 26Â° N latitude and east of 86Â° W longitude. Separately, President George H. W. Bush issued a presidential directive in 1990 ordering DOI not to conduct offshore leasing or preleasing activity in multiple parts of the OCSâincluding portions of the Eastern Gulfâuntil after 2000. In 1998, President Bill Clinton used his authority under Section 12(a) of the Outer Continental Shelf Lands Act (OCSLA) to extend the presidential offshore leasing prohibitions until 2012. President Clinton's order expanded the portion of the Eastern Gulf withdrawn from leasing consideration. The withdrawals designated during the Clinton Administration lasted until President George W. Bush modified them in 2008 to open multiple withdrawn areas to leasing. By that time, GOMESA had been enacted, so President Bush's action did not open the Eastern Gulf moratorium area to leasing. Distribution of Gulf Revenues Prior to GOMESA Before GOMESA's enactment, federal revenues from oil and gas leasing in most parts of the Gulf were not shared with coastal states. The exception was revenue from leases in certain nearshore federal waters: under Section 8(g) of the OCSLA (as amended), states receive 27% of all OCS receipts from leases lying wholly or partly within three nautical miles of state waters. Gulf Coast states argued for a greater share of the OCS revenues based on the significant effects of oil and gas development on their coastal infrastructures and environments. The states compared the offshore revenue framework to that for onshore public domain leases. Under the Mineral Leasing Act of 1920, which governs onshore oil and gas development, states generally receive 50% of all rents, bonuses, and royalties collected throughout the state, less administrative costs. GOMESA's Provisions GOMESA was signed into law on December 20, 2006. Sections 101 and 102 of the law contain a short title and definitions. Section 103 directs that two areas in the Central and Eastern Gulf be offered for oil and gas leasing shortly after enactment. These mandated lease sales took place in 2007-2009, and this provision of GOMESA has not been a focus of current congressional interest. Current interest has focused on Section 104 of the law, which imposes a moratorium on oil and gas leasing in certain parts of the Gulf, and Section 105, which contains provisions for revenue sharing from qualified leases with four states and their coastal political subdivisions, as well as with the LWCF's state assistance program. Section 104: Eastern Gulf Moratorium Section 104 of GOMESA states that, from the date of the law's enactment through June 30, 2022, the Secretary of the Interior is prohibited from offering certain areas, primarily in the Eastern Gulf, for "leasing, preleasing, or any related activity." The moratorium encompasses (1)Â areas east of a designated Milit ary Mission Line , defined in the law as the north-south line at 86Â°41Ê¹Â W longitude; (2) all parts of the Eastern Gulf planning area that lie within 125 miles of the Florida coast; and (3) certain portions of the Central Gulf planning area, including any parts within 100 miles of the Florida coast, as well as other specified areas. The resulting total moratorium formed by these overlapping areas is shown in gray in Figure 1 . Section 104 also allows for holders of existing oil and gas leases in some parts of the moratorium area to exchange the leases for a bonus or royalty credit to be used in the Gulf of Mexico. Section 104 prohibits not only lease sales in the moratorium area but also "preleasing" and other related activities. BOEM has clarified that such preleasing and related activities are not interpreted to include geological and geophysical (G&G) activitiesâsuch as seismic surveysâundertaken to locate resources with the potential to produce commercial quantities of oil and gas. BOEM interprets GOMESA to allow these G&G surveys in the moratorium area. The moratorium imposed by Section 104 expires on June 30, 2022. The 116 th Congress is debating whether to allow the moratorium to expire as scheduled or to amend GOMESA (or enact other legislation) to potentially further restrict federal oil and gas activity in this area. The following sections discuss scenarios for future leasing in the area under current provisions, legislative proposals to provide for other outcomes, and selected issues for Congress related to the moratorium provisions. Scenario Under Current Statutory Framework Absent further action by Congress, after June 30, 2022, the executive branch could potentially offer new oil and gas leases in the expired moratorium area. Under the OCSLA, the Secretary of the Interior could decide to include or exclude the area in future five-year offshore oil and gas leasing programs, based on specified criteria. The OCSLA also gives the President discretion to withdraw the area, temporarily or indefinitely, from leasing consideration, which would render it unavailable for inclusion in a DOI leasing program. The Trump Administration has indicated interest in pursuing oil and gas leasing in the GOMESA moratorium area after the moratorium's expiration. BOEM's initial draft of a five-year oil and gas leasing program for 2019-2024 (referred to as the "draft proposed program" or DPP) includes two lease sales in the moratorium area, one in 2023 and one in 2024. The DPP proposes to offer all available tracts in the former moratorium area after the expiration. BOEM also indicated that it would analyze two secondary options that would exclude some portions of the moratorium area from the lease sales ( Figure 2 ). First, BOEM is analyzing a potential "coastal buffer" off Floridaâat distances of 50, 75, 100, or 125 milesâto accommodate military activities and nearshore use. Second, BOEM is separately analyzing a potential 15-mile leasing buffer offshore of Baldwin County, AL, to minimize visual and other impacts to onshore coastal areas. The next draft of the 2019-2024 program is expected to reflect the results of BOEM's analysis. Under the planning process for the program, which is governed by requirements of both the OCSLA and the National Environmental Policy Act, sales listed in the DPP could be retained, modified, or removed in subsequent drafts of the program. In deciding whether to include the sales (either in their current form or with modifications) in the final leasing program, the Secretary of the Interior must weigh economic, social, and environmental criteria. Among the factors the Secretary must consider under the OCSLA are coastal state governors' views on leasing off their coasts. Recent governors of Florida, the state most closely adjacent to the moratorium area, generally have expressed opposition to leasing in this area. Governors of other Gulf Coast statesâAlabama, Louisiana, Mississippi, and Texasâgenerally have expressed support for oil and gas leasing in the Eastern Gulf. The Secretary also must consider the views of other affected federal agencies. One key agencyâDODâhistorically has opposed new leasing in the area, due to DOD's use of this part of the Gulf as a military testing and training ground (see " Military Readiness "). Both DOD and the Gulf producing states, along with some Members of Congress and many other stakeholders, submitted public comments on the 2019-2024 DPP. These comments are to be taken into account in the second draft of the program. Another round of public comment is expected to be solicited before the program could be finalized. The oil and gas industry has indicated interest in leasing in the moratorium area. Some industry representatives have stated that the Eastern Gulf represents a more attractive leasing prospect than other OCS areas currently unavailable for leasing (e.g., the Pacific and Atlantic regions) because data on the Eastern Gulf are better developed than for these other areas, and nearby infrastructure is already in place to facilitate exploration and development. Industry representatives have expressed particular interest in the deepwater Norphlet play, which spans parts of the Eastern and Central Gulf. Legislative Proposals A number of legislative proposals in the 116 th Congress have sought to extend GOMESA's moratorium or permanently prohibit leasing in the moratorium area. By contrast, other legislation would mandate lease sales in the area directly following the moratorium's current expiration date. Table 2 summarizes provisions of relevant 116 th Congress bills. Two of these bills, H.R. 4294 and S. 13 , include provisions affecting GOMESA revenue sharing, discussed further in Table 5 . One proposal related to the moratorium has passed the House of Representatives in the 116 th Congress: H.R. 205 , the Protecting and Securing Florida's Coastline Act of 2019. The bill would amend GOMESAâto extend the Eastern Gulf moratorium indefinitely, thus precluding future oil and gas leasing in the area. In its report on the bill, the House Natural Resources Committee stated that a continued moratorium is necessary because leasing in the Eastern Gulf would compromise military readiness and "pose existential threats to Florida's tourism, fishing, and recreation economy, which rely on clean water and healthy beaches." In dissenting views, some committee members contended that oil and gas leasing in the area could successfully coexist with fishing, tourism, and military operations, and pointed to the role of Gulf oil and gas revenues in funding environmental restoration activities and land protection. Bills in earlier Congresses sought other types of outcomes related to the GOMESA moratorium. For example, some legislation would have enabled leasing in portions of the moratorium area before the 2022 expiration date, effectively shrinking the moratorium area. Other legislation would have prohibited some activities in the moratorium area that are not currently restricted by GOMESA, such as seismic surveys or research on potential areas for offshore drilling. These proposals have not been included to date in 116 th Congress legislation. Selected Issues Economic and Budgetary Considerations An extension of GOMESA's leasing prohibitions could result in a loss to the government of future federal revenues (to the extent that leasing and commercial production would otherwise take place when the moratorium expires). Also, some oil and gas industry advocates have contended that future development in the Eastern Gulf could contribute billions of dollars annually to the nation's gross domestic product, mainly through contributions to Gulf state economies, which they contend would be lost were the moratorium to continue. By contrast, some in the commercial fishing, tourism, and recreation sectors have focused on potential economic costs to these sectors if oil and gas development takes place off the coast of Florida, with particular emphasis on potential financial losses if a major oil spill were to occur. They point to estimates showing significant costs to these industries from the 2010 Deepwater Horizon oil spill. Other stakeholders express concern that any oil and gas activities in these areas would contribute to greenhouse gas emissions and human-induced climate change, with accompanying direct and indirect costs. The Congressional Budget Office (CBO) has estimated certain budgetary effects of a moratorium extension in relation to budget projections under existing law. CBO has estimated that bills to extend the moratorium would reduce offsetting receipts and thus increase direct federal spending. As a result, such bills may be subject to certain budget points of order unless offset or waived. For example, for the version of H.R. 205 reported by the House Committee on Natural Resources, CBO estimated that the bill's extension of GOMESA's moratorium would increase direct spending by $400 million over 10 years. Military Readiness The extent to which the GOMESA moratorium is needed for U.S. military readiness also has been at issue. The area east of the Military Mission Line in the Eastern Gulf provides about 101,000 square miles of surface area and overlying air space, which is the largest overwater DOD test and training area in the continental United States. DOD historically has expressed a need for an oil and gas leasing moratorium in this area. For instance, in 2006, DOD stated that its testing and training activities in the Eastern Gulf were "intensifying" and requiredâ"large, cleared safety footprints free of any structures on or near the water surface." In 2017, DOD wrote that the agency "cannot overstate the vital importance of maintaining this moratorium.... Emerging technologies such as hypersonics, autonomous systems, and advanced sub-surface systems will require enlarged testing and training footprints, and increased DoD reliance on the Gulf of Mexico Energy Security Act's moratorium beyond 2022." More recently, in a 2018 report to Congress on preserving military readiness in the Eastern Gulf, DOD wrote: No other area in the world provides the U.S. military with ready access to a highly instrumented, network-connected, surrogate environment for military operations in the Northern Arabian Gulf and Indo-Pacific Theater. If oil and gas development were to extend east over the [Military Mission Line], without sufficient surface limiting stipulations and/or oil and gas activity restrictions mutually agreed by the DoD and Department of Interior (DoI), military flexibility in the region would be lost and test activities severely affected. Some Members of Congress and other stakeholders have interpreted the wording of the 2018 reportâparticularly its phrase "without sufficient surface limiting stipulations and/or oil and gas activity restrictions"âas signaling a greater DOD openness to oil and gas activities in the moratorium area than had been expressed in some earlier DOD communications. The phrasing might be read to suggest that military readiness and oil and gas development could be mutually accommodated, given appropriate stipulations and restrictions. Oil and gas leases awarded in the Central and Western Gulf often contain stipulations related to military activities, such as those requiring the lessee to assume risks of damage from military activities, to control electromagnetic emissions in defense warning areas, to consult with military commanders before entering some areas, and/or to evacuate areas as needed for military purposes. BOEM also typically reserves the right to temporarily suspend a lease in the interest of national security. The 2018 report does not clarify what types of lease stipulations and restrictions might be necessary to accommodate the more intensive testing and training activities in the Eastern Gulf. The report states that some military activities in this area may be incompatible with the presence of fixed or mobile oil platforms. The report expresses concerns that increased vessel traffic and underwater noise could jeopardize some military activities. It also discusses concerns about potential foreign observation of DOD activities, if foreign entities are allowed to control offshore assets or otherwise conduct business near military ranges in the Eastern Gulf. If these military concerns were to lead to more stringent restrictions on oil and gas operations than are mandated in other parts of the Gulf, a question would be how such restrictions might affect industry interest in bidding on leases in the Eastern Gulf. In its cost estimate for H.R. 205 , CBO identified defense-related constraints (and the potential incompatibility of some development with Florida's Coastal Management Program) as factors that could reduce the value of Eastern Gulf leases to industry bidders. However, some industry representatives have expressed consistent interest in leasing in the area and have contended that economic returns on leases in this area would be substantial, despite potential restrictions related to military activities. Section 105: Revenue Sharing Section 105 of GOMESA provides for federal revenues from certain qualified leases in the Gulf of Mexico to be shared under specified terms with four Gulf producing statesâAlabama, Louisiana, Mississippi, and Texasâand their "coastal political subdivisions" or CPSs (e.g., coastal counties or parishes), as well as with the LWCF state assistance program. Specifically, each year the Secretary of the Treasury is to deposit 50% of qualified revenues in a special account (the remaining 50% are deposited in the General Fund of the U.S. Treasury as miscellaneous receipts). From this special account, the Secretary disburses 75% of funds to the Gulf producing states and their CPSs, and 25% to the LWCF state assistance program. Accordingly, of the total qualified revenues in a given year, the states and CPSs receive 37.5% (i.e., 75% of the 50% in the special account), and the LWCF receives 12.5% (25% of the 50%). The law's definition of "qualified" OCS revenues differs for the first decade after GOMESA's enactment (FY2007-FY2016) versus for subsequent years. For FY2007-FY2016 (often referred to as GOMESA's Phase I), the law defines qualified OCS revenues to include all bonus bids, rents, royalties, and other sums due and payable to the United States from leases in the Eastern Gulf and the Central Gulf's 181 South Area entered into on or after the date of GOMESA's 2006 enactment. These are the relatively small areas shown as areas A and B in Figure 1 . For FY2017 and beyond (Phase II), the geographic area of qualified revenues expands. In addition to revenues from post-2006 leases in the Phase I areas, the qualified revenues in Phase II include those from post-2006 leases in the Central Gulf's portion of the 181 Area, shown as areaÂ C in Figure 1 . The Phase II qualified revenues also include the "2002-2007 planning area"âthe large area shown in yellow in Figure 1 , encompassing most of the Western and Central Gulf, where the bulk of production takes place. Accordingly, revenues qualified for sharing in Phase II are likely to be notably higher than in Phase I ( Table 3 ). For the added Phase II areas, Section 105 stipulates that the total amount of qualified revenues made available each year to the states and their CPSs and the LWCF (collectively) shall not exceed $500 million for each of FY2016-FY2055. A later law, P.L. 115-97 , raised the cap to $650 million for two of these years, FY2020 and FY2021. Given the percentage distributions specified in the law for each recipient, the amounts that can be shared with states and their CPSs from the added Phase II areas are capped at $375.0 million in most years (and $487.5 million in FY2020 and FY2021). The amounts that can be shared with the LWCF are capped at $125.0 million in most years (and $162.5 million in FY2020 and FY2021). Phase II began with FY2017 revenues, but GOMESA specifies that revenues shall be shared with recipients in the fiscal year immediately following the fiscal year in which they are received. Thus, in terms of payments, the first fiscal year reflecting Phase II revenue sharing was FY2018. The shared revenues rose notably in that year compared with previous years. Table 3 shows GOMESA revenue distributions since the law's enactment, with the transition from Phase I distributions to Phase II distributions occurring between FY2017 and FY2018. GOMESA directs the Secretary of the Interior to establish a formula to allocate each year's qualified state revenues among the four Gulf producing states and their CPSs. The allocations to each state primarily depend on its distance from leased tracts, with states closer to the leased tracts receiving a higher share. The law additionally provides that each state must receive an annual minimum of at least 10% of the total amount available to all the Gulf producing states for that year. Further, GOMESA directs that the Secretary shall pay 20% of the allocable share of each Gulf producing state to the state's CPSs. See the box below for additional details on the state allocations. GOMESA authorizes the states and CPSs to use revenues for the following purposes: Projects and activities for the purposes of coastal protection, including conservation, coastal restoration, hurricane protection, and infrastructure directly affected by coastal wetland losses. Mitigation of damage to fish, wildlife, or natural resources. Implementation of a federally approved marine, coastal, or comprehensive conservation management plan. Mitigation of the impact of OCS activities through the funding of onshore infrastructure projects. Planning assistance and the administrative costs of complying with GOMESA. (No more than 3% of a state or CPS's revenues may be used for this purpose.) The following sections discuss the scenario for GOMESA revenue sharing under the law's current provisions, summarize legislative proposals for changes, and explore selected issues. Scenario Under Current Statutory Framework Under GOMESA, revenue sharing with the states and LWCF continues indefinitely, and the annual cap on shared revenues from the Phase II areas continues through FY2055. After that year, all qualified Gulf revenues would be shared under the current formulaâ37.5% to states and their CPSs and 12.5% to the LWCFâregardless of whether the shared amount from the Phase II areas exceeds $500 million. DOI, in its annual budget justifications, develops five-year projections of qualified GOMESA revenues. Table 4 shows DOI projections for FY2020-FY2024 shared revenues (which are half of all qualified revenues), by revenue collection year. The revenues collected in a given year would be shared with the states and LWCF in the following fiscal year. In general, the DOI projections for a given year have not always been consistent over time. Changing oil prices have been a major factor in revised projections. Under the current scenario, the majority of the moratorium areaâthe portion shown in gray in Figure 1 âdoes not qualify for revenue sharing, even after the moratorium ends in June 2022. Instead, any revenues from oil and gas leasing and development in this area after the moratorium expires would go entirely to the Treasury. Also, GOMESA does not provide for revenue sharing with Florida, although some of the qualified revenue-sharing areasâsuch as portions of the 181 Areaâare closer to Florida than to the other Gulf producing states. Legislative Proposals In the 116 th Congress, several bills would amend GOMESA to increase the portion of qualified revenues shared with the Gulf producing states by raising the states' percentage share, eliminating the revenue-sharing cap, or both. Some legislation also would expand the purposes for which states may use the GOMESA revenues, modify the uses of the LWCF share, or add Florida to the revenue-sharing arrangement. Table 5 describes selected relevant bills and their provisions. None of the bills has been reported from committee in the 116 th Congress. In contrast with bills that would increase the state revenue share, some legislative proposals in earlier Congresses would have ended state revenue sharing under GOMESA. For example, in the 114 th Congress, would have amended GOMESA to provide that 87.5% of qualified revenues under the law would be deposited in the Treasury's General Fund, while 12.5% would continue to be provided for LWCF financial assistance to states. This proposal is similar to some legislative proposals in DOI budget requests under the Obama and Trump Administrations (see " Determining the Appropriate State Share "). Selected Issues Determining the Appropriate State Share Members of Congress differ in their views on the extent to which Gulf Coast states should share in revenues derived from oil and gas leasing in federal areas of the Gulf. State officials from the Gulf producing states and some Members of Congress have expressed that the Gulf producing states should receive a higher share than is currently provided under GOMESA, given the costs they incur to support offshore extraction activities. These stakeholders have argued that the revenues are needed to mitigate environmental impacts and to maintain the necessary support structure for the offshore oil and gas industry. For example, at a 2018 hearing of the House Committee on Natural Resources, former Senator Mary Landrieu stated: "It is important to note that revenue sharing was established â¦ to recognize the contributions that states and localities make to facilitate the extraction and production of these resources, including the provision of infrastructure to enable the federal activity: transportation, hospitals, schools and other necessary governmental services." Advocates have emphasized that Gulf Coast areas, especially coastal wetlands, face significant environmental challenges, owing in part to hydrocarbon development (among other activities). These advocates have contended that additional federal revenues are critical to address environmental challenges and economic impacts of wetland loss. Advocates point to a disparity between the 37.5% state share provided under GOMESA and the 50% share of revenues that most states receive from onshore public domain leases under the Mineral Leasing Act. They contend that a comparable state revenue share under GOMESA would significantly contribute to coastal wetland restoration, given GOMESA's requirement that the Gulf producing states use the funding to address coastal protection, damage mitigation, and restoration (and given comparable requirements under some state laws). By contrast, some other Members of Congress, as well as the Obama and Trump Administrations at times, have contended that GOMESA revenue sharing with the states should be reduced or eliminated to facilitate use of these revenues for broader national purposes. They have argued that, since the OCS is a federal resource, the benefits from offshore revenues should accrue to the nation as a whole, rather than to specific coastal states. Under the Obama Administration, DOI budget requests for FY2016 and FY2017 recommended that Congress repeal GOMESA state revenue-sharing payments and direct a portion of the savings to programs that provide "broad â¦ benefits to the Nation," such as a proposed new Coastal Climate Resilience Program "to provide resources for at-risk coastal States, local governments, and their communities to prepare for and adapt to climate change." Legislation in the 114 th Congress ( S. 2089 ; see " Legislative Proposals ") would have amended GOMESA to eliminate the state revenue sharing and provide for the state share to go to the Treasury's General Fund. For FY2018, the Trump Administration proposed that Congress repeal GOMESA's state revenue-sharing provisions, in order to "ensure [that] the sale of public resources from Federal waters owned by all Americans, benefit all Americans." The Trump Administration has not included similar proposals in subsequent budget requests, and no legislation to reduce or eliminate GOMESA state revenue sharing has been introduced to date in the 116 th Congress. Set of Leases Qualified for Revenue Sharing Although Phase II of GOMESA considerably expanded the set of leases contributing to revenue sharing, some Gulf leases still do not qualify, because the law applies only to leases that were entered into on or after the date of GOMESA's enactment (December 20, 2006). It appears from 2019 leasing data maintained by BOEM that approximately 61% of the more than 2,500 active leases in the Gulf of Mexico were entered into on or after the enactment date, and thus would qualify for revenue sharing under GOMESA's current terms. However, the majority of these newer leases are not producing oil and gas; and leases awarded before GOMESA's enactmentâwhich do not qualifyâcontinue to contribute a substantial portion of production royalties. For this reason, the percentage of Gulf revenues subject to GOMESA sharing is much smaller than the percentage of Gulf leases subject to GOMESA sharing. For example, of federal offshore revenues disbursed in FY2019 (the high majority of which come from the Gulf), GOMESA-qualified revenuesâincluding those distributed to states and their CPSs, the LWCF state grant program, and the Treasury combinedâconstituted 18% of the total. The percentage of total revenues that qualify for sharing under GOMESA might be expected to increase over time, to the extent that older leases gradually terminate and current and future leases begin producing. Some Members of Congress have proposed that GOMESA's terms be altered to include an expanded set of leases in the qualified sharing group. For instance, in the 116 th Congress, S. 2418 would amend GOMESA to define the qualified leases as those entered into on or after October 1, 2000, rather than after GOMESA's 2006 enactment. According to BOEM data as of November 2019, this would more than double the number of producing leases eligible for GOMESA revenue sharing (although the addition in total leases would be relatively small). The result could be a higher revenue share with the states and their CPSs and the LWCF state grant program. Some other Members do not favor this type of change because it could reduce the portion of offshore revenues going to the Treasury for other federal purposes. Revenue Amounts and Adequacy for Legislative Purposes Offshore oil and gas revenues support a variety of federal and state activities, through amounts deposited annually in the LWCF and the Historic Preservation Fund (HPF) and through revenues shared with states under revenue-sharing laws. Revenue totals have fluctuated from year to year ( Table 1 ), raising questions about whether future revenues will be adequate to support these various activities and whether new legislation for offshore revenue distribution would strain available amounts. For example, some Members of Congress have considered whether raising GOMESA's state revenue share would result in insufficient funds to meet statutory requirements for deposits to the LWCF and HPF. Alternatively, some Members have questioned whether proposals to use offshore revenues for new conservation programs would reduce state sharing under GOMESA and jeopardize programs supported by the state-shared funds. Thus far, in each year since GOMESA's enactment, OCS revenues have been sufficient to provide for all distributions under current law. If bills in Table 5 were enacted to raise the GOMESA state revenue share to 50% and eliminate the revenue-sharing cap for states, it appears that, based on DOI projections for FY2020-FY2024, OCS revenues remaining after state sharing would still be more than sufficient to meet statutory requirements for deposits to the LWCF and HPF in these years. Various economic factors or policy decisions could affect these DOI projections, and under some theoretical scenarios, enactment of bills to increase the state share could affect the sufficiency of revenues to cover other legislative requirements. Similarly, under some scenarios, legislative proposals to fund new conservation programs with offshore revenues could affect amounts shared with the states under GOMESA. Whether this would occur would depend partly on the terms of the legislative proposals. For example, S. 500 and H.R. 1225 in the 116 th Congress would establish a new deferred maintenance fund for specified federal lands supported partly by offshore energy revenues. These proposals address the issue of revenue availability by specifying that the new deferred maintenance fund would draw only from miscellaneous receipts deposited to the Treasury after other dispositions are made under federal law. That is, if revenues were insufficient to provide for the funding amounts specified under these bills along with the other distributions required in law, it appears that the requirements of current laws (including GOMESA) would be prioritized. Also relevant are proposals by some Members of Congress and other stakeholders to significantly curtail or end OCS oil and gas leasing, in response to climate change concerns. Depending on the extent to which offshore production decreased, such policy changes could result in an insufficiency of revenues to meet all statutory requirements, especially over the long term as production from existing leases diminished. Some supporters of reducing or eliminating federal offshore oil and gas leasing have suggested that other revenue sources, such as from an expansion of renewable energy leasing on federal lands, should be found for desired federal programs. Some opponents of curtailing offshore oil and gas leasing have pointed to the revenue implications as an argument against such actions. Budgetary Considerations Bills that would increase the state share of GOMESA revenuesâby giving the states a higher revenue percentage, eliminating revenue-sharing caps, or bothâhave been identified by CBO as increasing direct spending. For example, in cost estimates for 115 th Congress legislationâwhich would have made similar state-sharing changes to those proposed in H.R. 3814 , H.R. 4294 , and S. 2418 ( Table 5 )âCBO estimated that these changes would increase direct spending of OCS receipts by $2.1 billion over a 10-year period. As a result, such legislation may be subject to certain budget points of order unless offset or waived. As of January 2020, CBO has not released cost estimates for the 116 th Congress bills discussed in Table 5 (none of which has been reported from committee), and it is unclear how CBO would estimate costs associated with those bills or whether some provisions in those bills might be estimated to offset costs of other provisions. For example, H.R. 4294 contains provisions to repeal presidential withdrawals of offshore areas from leasing consideration and to facilitate offshore wind leasing in U.S. territories, among others. CBO scored similar provisions in 115 th Congress bills as increasing offsetting receipts (and thus partly offsetting bill costs). Florida and Revenue Sharing Under GOMESA's current provisions, Florida is not among the Gulf producing states eligible for revenue sharing. Some proposals, including S. 13 in the 116 th Congress, would add Florida to the group of states receiving a revenue share. Because the high majority of Gulf leasing takes place in the Western and Central Gulf planning areas, which do not abut Florida, Florida's share of GOMESA revenues if S. 13 were enacted would likely be lower than those of the other Gulf Coast states, especially Louisiana and Texas. Nonetheless, since GOMESA provides that every Gulf producing state must receive at least 10% of the annual state revenue share, adding Florida to the Gulf producing states would provide at least that portion of GOMESA revenues for Florida and would correspondingly reduce the total available to the other Gulf producing states. Some Florida stakeholders have opposed legislation to add Florida to GOMESA revenue sharing on the basis that doing so could incentivize eventual oil and gas development off Florida. Others support a continued moratorium off Florida and support giving Florida a revenue share from leasing elsewhere in the Gulf. These stakeholders contend that Florida bears risks from oil and gas leasing elsewhere in the Gulf (particularly related to potential oil spills) and so should also see benefits. This position is captured in S. 13 , which would extend the GOMESA moratorium through 2027 and add Florida as a revenue-sharing state. Still others support adding Florida as a revenue-sharing state as part of a broader change to allow leasing and revenue sharing in areas offshore of Florida. Supporters of this approach, including some from the current Gulf producing states, may contend that an increase in the number of states that share GOMESA revenues should be accompanied by a growth in the area qualified for revenue sharing to reduce the likelihood of a smaller share for the original four states. Conclusion The current period is one of transition for the oil and gas leasing framework established by GOMESA for the Gulf of Mexico. First, the Eastern Gulf leasing moratorium is set to expire in 2022, and BOEM is proposing offshore lease sales for the moratorium area starting in 2023. Second, the Gulf leases subject to revenue sharing expanded substantially starting in FY2017, and DOI projects revenues from these areas will approach or reach GOMESA's revenue-sharing cap in FY2024. Congress is considering whether GOMESA's current provisions will best meet federal priorities going forward, or whether changes are needed to achieve various (and sometimes conflicting) national goals. Regarding the moratorium provisions, a key question is whether decisions about leasing in the Eastern Gulf should be legislatively mandated or left to the executive branch to control. Absent any legislative intervention, after June 2022, the President and the Secretary of the Interior are to decide whether, where, and under what terms to lease tracts in the former moratorium area, following the statutory provisions of the OCSLA. Some Members of Congress seek to amend GOMESAâeither to extend the moratorium or to mandate lease sales in the areaârather than deferring to the OCSLA's authorities for executive branch decisionmaking. At stake are questions of regional and national economic priorities, environmental priorities, energy security, and military security. With respect to Gulf oil and gas revenues, GOMESA's current revenue-sharing provisions take into account multiple priorities: mitigating the impacts of human activities and natural processes on the Gulf Coast (through state revenue shares directed to this purpose); supporting conservation and outdoor recreation nationwide (through the LWCF state assistance program); and contributing to the Treasury. For the most part, legislative proposals to change the terms of GOMESA revenue distribution have supported some or all of these priorities but have sought to change the balance of revenues devoted to each purpose. Also at issue are proposals to use the revenues for new (typically conservation-related) purposes outside the GOMESA framework, as well as proposals to substantially reduce or eliminate Gulf oil and gas productionâwith corresponding revenue implicationsâin the context of addressing climate change. The 116 th Congress is debating such questions as it considers multiple measures to amend GOMESA.


T he House pay-as-you-go (PAYGO) rule is generally intended to discourage or prevent Congress from taking certain legislative action that would increase the deficit. It prohibits the consideration of direct spending and revenue legislation that is projected to increase the deficit over either a 6-year or an 11-year period. In effect, the rule requires legislation that includes provisions projected to increase direct spending or reduce revenues to also include offsetting provisions over the two specified periods. The House PAYGO rule was first established at the beginning of the 110 th Congress and modified in the 111 th Congress. It was replaced by the cut-as-you-go (CUTGO) rule, which applied only to direct spending legislation, at the beginning of the 112 th Congress. The PAYGO rule was reinstated, with modifications, replacing the CUTGO rule, at the beginning of the 116 th Congress. This report explains the House PAYGO rule's features, describes its legislative history, and discusses how it compares to statutory PAYGO requirements. It updates the previous version (dated November 30, 2010), largely with information about the CUTGO rule and the PAYGO rule, as adopted in the 116 th Congress. The full text of the House PAYGO rule is provided in the Appendix . Features of the House PAYGO Rule The House PAYGO rule adopted for the 116 th Congress prohibits the consideration of legislation affecting direct spending and revenues that is projected to increase the deficit, or reduce the surplus, over either of two time periods: (1) the 6-year period consisting of the current fiscal year, the budget year, and the 4 ensuing fiscal years; or (2) the 11-year period consisting of the current year, the budget year, and the ensuing 9 fiscal years. The House PAYGO rule applies to legislation affecting direct spending and revenues . Direct spending, also referred to as mandatory spending, has two distinguishing features: (1) it is provided or controlled in authorizing legislation; and (2) it generally continues without any annual legislative action. Examples of programs funded through direct spending include Medicare, unemployment compensation, and federal retirement. Direct spending is within the jurisdiction of the respective authorizing committees. Revenues are the funds collected from the public primarily as a result of the federal government's exercise of its sovereign taxing power. They consist of receipts from individual income taxes, payroll taxes, corporate income taxes, excise taxes, duties, gifts, and miscellaneous receipts. Revenues are within the jurisdiction of the Committee on Ways and Means in the House. The House PAYGO rule does not apply to discretionary spending , which is provided and controlled through the annual appropriations process. Discretionary spending is not counted for purposes of determining whether legislation increases the deficit under the House PAYGO rule. The rule generally requires that each measure affecting direct spending and revenues not increase the deficit over either of the two time periods specified. That is, to comply with the rule, each measure that includes provisions projected to increase direct spending or reduce revenues must also include offsetting provisions projected to reduce direct spending, increase revenues, or both, by equivalent amounts. A projected deficit reduction resulting from a measure previously passed by the House, or one to be considered subsequently by the House, cannot be used to offset a deficit increase due to provisions in a measure currently under consideration. The rule provides one exception to this measure-by-measure application. Under clause 10(b) of House Rule XXI, savings from a previously passed measure may be included in determining a separate measure's PAYGO compliance if a special rule provides that the two measures are to be combined upon engrossment. The rule specifies that a determination of the effect of direct spending and revenue legislation on the deficit or surplus is to be based on estimates made by the Committee on the Budget relative to the Congressional Budget Office (CBO) baseline estimates. In producing its baseline estimates, CBO projects revenues, spending, and deficit or surplus levels under existing law (i.e., assuming no legislative changes). Under the rule, such baseline estimates are to be consistent with Section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended. The House PAYGO rule does not apply to direct spending increases or revenue reductions that occur under existing law. That is, if direct spending increases because more individuals qualify for benefits under existing law, for example, any increase in the deficit is not counted for PAYGO purposes and is beyond the rule's control. The House PAYGO rule exempts provisions designated as an emergency from being counted in determining compliance with the rule. Under clause 10(c) of House Rule XXI, a determination as to whether legislation increases the deficit, or reduces the surplus, shall exclude any provision "expressly designated as an emergency for the purposes of pay-as-you-go principles." If legislation contains such a designation, the chair must put the question of consideration to the full House prior to its consideration. That is, the House must vote on whether or not to consider the legislation, even though all or certain budgetary effects would be exempt from the House PAYGO rule. If the question is decided in the affirmative (by simple majority), the legislation may then be considered. Alternatively, if the question is decided in the negative, the legislation may not be considered. The House PAYGO rule is enforced by a point of order to prevent the consideration of legislation that does not meet the requirement. If legislation brought up on the House floor violates the rule (i.e., increases the deficit, or reduces the surplus, in either of the two fiscal-year periods), a Member may raise a point of order against it. If the point of order is sustained, the legislation may not be considered (in the case of an amendment, the amendment falls). The House rule, however, is not self-enforcing: a Member must raise the point of order to enforce it. In addition, the House rule may be waived by a special rule reported by the House Rules Committee and agreed to by the House by majority vote, by considering the legislation under the suspension of the rules procedures, or by unanimous consent. Finally, the House PAYGO rule, as part of the standing rules of the House, is effective for the current Congress for which it is adopted. Legislative History of the House PAYGO Rule The House PAYGO rule was first established at the beginning of the 110 th Congress. It was modified at the beginning of the 111 th Congress, as part of the opening-day rules package, and again in the second session of the 111 th Congress, as part of a special rule providing for the consideration of an unrelated measure. In addition, its application to certain legislation was modified during the first session of the 111 th Congress, as part of the FY2010 budget resolution ( S.Con.Res. 13 ). At the beginning of the 112 th Congress, it was replaced with the CUTGO rule, which focused exclusively on the mandatory spending effects of legislation, eliminating any revenue effects from the budgetary evaluation under the rule. Most recently, at the beginning of the 116 th Congress, the PAYGO rule was reinstituted, covering both mandatory spending and revenues, with certain modifications. Actions in the 110th Congress Even before the 110 th Congress began, the new Democratic leadership in both chambers indicated an intention to "restore" PAYGO rules. Accordingly, the House adopted its own PAYGO rule as part of its opening-day rules package. The original House PAYGO rule generally prohibited the consideration of legislation affecting direct spending and revenues that was projected to increase the deficit or reduce the surplus over a 6-year and an 11-year period. In this original form, as it does in its current form, the rule counted on-budget and off-budget entities (such as Social Security) in determining the effect on the deficit (referred to as the unified budget deficit ). The rule also directed the Budget Committee to use the following particular baseline estimates when determining the effect of legislation on the deficit: after the beginning of a new calendar year but before the consideration of a budget resolution, the Budget Committee was to use the most recent baseline estimates supplied by CBO; and after the consideration of the budget resolution, the Budget Committee was to use the most recent baseline estimates supplied by CBO used in considering the budget resolution. Lastly, the original rule provided no explicit exemptions, such as adopted in the 116 th Congress. Actions in the 111th Congress At the beginning of the 111 th Congress, following the customary practice, the House adopted its rules by adopting the preceding Congress's rules, including the House PAYGO rule, with certain amendments. Three changes were made to the PAYGO rule. First, the rule was modified to require the Budget Committee to use baseline estimates supplied by CBO, replacing the particular baseline estimates specified in the original rule. Second, a provision was added to the rule to allow for an exception to its measure-by-measure application. Under this exception, which is still in the rule in the 116 th Congress, the budgetary effects of a House-passed bill may be used to determine compliance with the PAYGO requirement of a separate measure if a special rule provides that the two measures are to be combined upon engrossment. Lastly, the rule was amended to exempt provisions designated as an emergency and to provide for a question of consideration for legislation containing such a designation. Later in the 111 th Congress, during the second session, the House further amended clause 10 of Rule XXI generally to align the House PAYGO rule with the Statutory Pay-As-You-Go Act of 2010, which was enacted earlier in the year. The changes were included in Section 5 of H.Res. 1500 , a special rule providing for the consideration of an unrelated measure. The changes largely related to scoring issuesâwhat budgetary effects would count and not count for purposes of determining if legislation increased the deficit (or reduced the surplus). First, the rule was amended to focus on the "on-budget deficit," excluding any "off-budget" effects, such as those affecting the Social Security trust funds. Second, the rule was amended to require that determinations of the budgetary effects of legislation were consistent with the Statutory PAYGO Act. Specifically, the following scoring requirements were incorporated into the House PAYGO rule. Included in estimates: budgetary effects resulting from "outyear modifications" of direct spending laws contained in appropriations acts. Excluded from estimates: budgetary effects due to "timing shifts" from inside to outside the 11-year period covered by the PAYGO rule; and budgetary effects resulting from legislation extending current policy (referred to as "adjustments for current policies"), which were scheduled by statute to expire at the time, in four areas: (1) Medicare payments to physicians; (2) the estate and gift tax; (3) the alternative minimum tax (AMT); and (4) middle-class tax cuts. Actions in the 112th Congress At the beginning of the 112 th Congress, in adopting the rules of the House, the new Republican majority replaced the PAYGO rule with a new Cut-As-You-Go (CUTGO) rule. In general, the CUTGO rule focused on the net effect of new legislation on mandatory spending only, excluding any effects on revenues. Specifically, the rule prohibited the consideration of any legislation that would have the net effect of increasing mandatory spending over the same 6-year and 11-year periods as the previous PAYGO rule. Excluding the projected revenue effects had at least two implications: (1) the House could consider legislation reducing revenues, regardless of whether it would increase the projected deficit, without being vulnerable to a point of order under the rule; and (2) legislation projected to increase mandatory spending could not be offset by an increase in revenues, in order to comply with the rule. The CUTGO rule also did not continue the "adjustments for current policies," as provided in the Statutory PAYGO Act. It is worth noting that these statutory adjustments were set to expire at the end of 2011 and were not extended beyond 2011. Other than these changes, the CUTGO rule generally retained the procedures related to the operation of the previous PAYGO rule. For example, the budgetary effects designated as emergency requirements under the Statutory PAYGO Act were excluded and also required a vote on the question of consideration, as provided in the new PAYGO rule, as described above. The CUTGO rule was renewed, without change, in each subsequent Congress, through the 115 th Congress (i.e., through 2018). Actions in the 116th Congress At the beginning of the 116 th Congress, in adopting the rules of the House, the new Democratic majority reinstituted the PAYGO rule, replacing the previous CUTGO rule. Most significantly, the PAYGO rule reincorporates the projected revenue effects of legislation into the evaluation of determining a violation. The new rule, however, is not exactly the same PAYGO rule that existed at the end of the 111 th Congress. In particular, unlike the previous PAYGO rule, it includes off-budget effects, such as those that affect the receipts and outlays of the Social Security trust funds. In general, other than these changes, the new House PAYGO rule retains the procedures related to the operation of the former CUTGO and PAYGO rules. For example, the new PAYGO rule continues to provide for combining the budgetary effects of two measures, under particular circumstances, and for excluding budgetary effects designated as an emergency, as described in the " Features of the House PAYGO Rule ," section above. Comparison to Statutory PAYGO Requirements The House PAYGO rule exists alongside similar PAYGO requirements in statute. Like the House rule, the Statutory Pay-As-You-Go Act of 2010 (Title I of P.L. 111-139 , 124 Stat. 8-29), enacted on February 12, 2010, is intended to discourage or prevent Congress from taking certain legislative action that would increase the on-budget deficit. It generally requires that legislation affecting direct spending or revenues not increase the deficit over the 6-year and 11-year time periods, as in the House rule. Notably, the Statutory PAYGO Act relates only to the on-budget effects of legislation, excluding any off-budget effects, such as those affecting the Social Security trust funds. While the House PAYGO rule and the statutory requirements are similar, they are different in significant ways relating to when and how they are enforced. The House rule applies during the consideration of legislation on the House floor. That is, the House rule prohibits the consideration of the legislation on the House floor if it does not comply with the requirement. In addition, under the House PAYGO rule, each measure affecting direct spending and revenues must comply with the requirement, with the one exception of two measures combined upon engrossment, as explained above. The Statutory PAYGO Act, in contrast, applies the requirement to legislation after it has been enacted. Moreover, instead of requiring that each enacted bill not increase the deficit, the statutory rule requires that the net effect of all bills affecting direct spending and revenues (referred to as PAYGO legislation or PAYGO acts) enacted during a session of Congress not increase the deficit. That is, under the statutory rule, the net effect of all PAYGO acts enacted during a session of Congress must not increase the deficit over either a 5-year or a 10-year period. In other words, Congress can enact legislation increasing the deficit and still comply with the statutory rule as long as separate legislation offsetting such increases in the deficit is enacted during the same year. Reflecting the difference in when the PAYGO requirement is applied, the congressional and statutory rules also differ in how they are enforced. As noted above, the House PAYGO rule is enforced by a point of order to prevent the consideration of legislation that does not meet the requirement. In contrast, the statutory PAYGO rule is enforced by sequestrationâthe cancellation of budgetary resources provided by laws affecting direct spendingâto eliminate an increase in the deficit resulting from the enactment of legislation. The former is an internal procedure of the House, whereas the latter involves actions taken by the President and the Office of Management and Budget. The statutory PAYGO rule provides that if the net effect of direct spending and revenue legislation enacted during a year increases the deficit (i.e., violates the PAYGO requirement), budgetary resources in certain direct spending programs are cut in order to eliminate the increase in the deficit. Specifically, the average budgetary effects (i.e., any increase or decrease in the deficit) over 5-year and 10-year periods of each PAYGO act are placed on 5-year and 10-year scorecards, respectively. The PAYGO requirement effectively is applied to the balances on each of these scorecards 14 days after Congress adjourns at the end of a session. If either scorecard shows a positive balance (referred to as a debit ) for the budget year, the President is required to issue a sequestration order cancelling budgetary resources in non-exempt direct spending programs sufficient to eliminate the balance (the larger balance if both scorecards show a positive balance). Finally, although the House PAYGO rule must be adopted anew at the beginning of each new Congress, the Statutory PAYGO Act does not include any expiration date. Appendix. Text of the House Pay-As-You-Go (PAYGO) Rule: Clause 10 of House Rule XXI (116th Congress) 10. (a)(1) Except as provided in paragraphs (b) and (c), it shall not be in order to consider any bill, joint resolution, amendment, or conference report if the provisions of such measure affecting direct spending and revenues have the net effect of increasing the deficit or reducing the surplus for either the period comprisingâ (A) the current fiscal year, the budget year, and the four fiscal years following that budget year; or (B) the current fiscal year, the budget year, and the nine fiscal years following that budget year. (2) The effect of such measure on the deficit or surplus shall be determined on the basis of estimates made by the Committee on the Budget relative to baseline estimates supplied by the Congressional Budget Office consistent with section 257 of the Balanced Budget and Emergency Deficit Control Act of 1985. (b) If a bill, joint resolution, or amendment is considered pursuant to a special order of the House directing the Clerk to add as new matter at the end of such measure the provisions of a separate measure as passed by the House, the provisions of such separate measure as passed by the House shall be included in the evaluation under paragraph (a) of the bill, joint resolution, or amendment. (c)(1) Except as provided in subparagraph (2), the evaluation under paragraph (a) shall exclude a provision expressly designated as an emergency for purposes of pay-as-you-go principles in the case of a point of order under this clause against consideration ofâ (A) a bill or joint resolution; (B) an amendment made in order as original text by a special order of business; (C) a conference report; or (D) an amendment between the Houses. (2) In the case of an amendment (other than one specified in subparagraph (1)) to a bill or joint resolution, the evaluation under paragraph (a) shall give no cognizance to any designation of emergency. (3) If a bill, joint resolution, an amendment made in order as original text by a special order of business, a conference report, or an amendment between the Houses includes a provision expressly designated as an emergency for purposes of pay-as-you-go principles, the Chair shall put the question of consideration with respect thereto. (d) For the purpose of this clause, the terms "budget year" and "current year" have the meanings specified in section 250 of the Balanced Budget and Emergency Deficit Control Act of 1985, and the term "direct spending" has the meaning specified in such section 250 except that such term shall also include provisions in appropriations Acts that make outyear modifications to substantive law as described in section 3(4)(C) of the Statutory Pay-As-You-Go Act of 2010.


T he Livestock Mandatory Reporting (LMR) Act of 1999 ( P.L. 106-78 , Title IX; 7 U.S.C. Â§ 1635 et seq. ) amended the Agricultural Marketing Act of 1946 (7 U.S.C. Â§1621 et seq. ) to require that meat packers report prices and other information on purchases of cattle, swine, and boxed beef (wholesale cuts of beef) to the U.S. Department of Agriculture (USDA). Lamb and lamb meat were added through initial rulemaking, and the act was amended to include wholesale pork in 2010. In September 2015, Congress reauthorized LMR until September 30, 2020, in the enacted Agriculture Reauthorizations Act of 2015 ( P.L. 114-54 ). In past reauthorizations, most livestock industry stakeholders have supported reauthorization of the act and put forward proposals amending mandatory reporting. This report provides an overview of LMR and its legislative and rulemaking history; a description of the LMR program; and issues that the cattle, swine, and lamb industries have raised with USDA that could be considered during possible reauthorization. Information on House and Senate bills that would reauthorize LMR will be added should they become available. Background and History Before Congress enacted LMR in 1999, the USDA Agricultural Marketing Service (AMS) collected livestock and meat price and related market information from meat packers on a voluntary basis under the authority of the Agricultural Marketing Act of 1946. AMS market reporters collected and reported prices from livestock auctions, feedlots, and packing plants. The information was disseminated through hundreds of daily, weekly, monthly, and annual written and electronic USDA reports on sales of live cattle, hogs, and sheep and wholesale meat products from these animals. The goal was to provide all buyers and sellers with accurate and objective market information. By the 1990s, the livestock industry had undergone many changes, including increased concentration in meat packing and animal feeding, production specialization, and vertical integration (firms controlling more than one aspect of production). Fewer animals were sold through negotiated (cash or "spot") sales, while an increasing number of purchases were made under alternative marketing arrangements (e.g., formula purchases based on a negotiated price established in the future). These formula purchases were based on prices not publicly disclosed or reported. Some livestock producers, believing that such arrangements made it difficult or impossible for them to assess "fair" market prices for livestock going to slaughter, called for mandatory price reporting for packers and others who process and market meat. USDA had estimated in 2000 that the former voluntary system was not reporting transactions of the order of 35%-40% of cattle, 75% of hogs, and 40% of lambs. During initial debate in Congress on LMR, opponents, including some meat packers and other farmers and ranchers, argued that a mandate would impose costly new burdens on the industry and could cause the release of confidential company information. Nonetheless, some of these early opponents ultimately supported an LMR law. Livestock producers had experienced low prices in the late 1990s and were looking for ways to strengthen market prices. Some meat packers also supported a national consensus bill at least partly to preempt what they viewed as an emerging "patchwork" of state price reporting laws that could alter competition among packers operating under different state laws. Legislative and Rulemaking History LMR was enacted in October 1999 as part of the FY2000 Agriculture appropriations act. (See Table 1 , "Legislative and Rulemaking History.") The law mandated price reporting for live cattle, boxed beef, and live swine and allowed USDA to establish LMR for lamb purchases and lamb meat sales. The law authorized appropriations as necessary and required USDA to implement regulations no later than 180 days after the law was enacted. LMR was authorized for five years, until September 30, 2004. USDA issued a final rule on December 1, 2000. Although reporting for lamb was optional in the LMR statute, USDA established mandatory reporting for lamb in the final rule. The rule was to be implemented on January 30, 2001, but USDA delayed implementation until April 2, 2001, to allow for additional time to test the automated LMR program to ensure program requirements were being met. The implementation of LMR did not affect the continuation of the AMS voluntary price-reporting program. AMS continues to publish prices from livestock auctions and feeder cattle and pig sales through voluntary-based market news reports. LMR authority lapsed for two months in October 2004 before Congress extended it for one year to September 30, 2005. Authority for LMR lapsed again on September 30, 2005. At that time, USDA requested that all packers who were required to report under the 1999 act continue to submit required information voluntarily. About 90% of packers voluntarily reported, which allowed USDA to continue to publish most reports. In October 2006, Congress passed legislation to reauthorize LMR through September 30, 2010. This act also amended swine reporting requirements from the original 1999 law by separating the reporting requirements for sows and boars from barrows and gilts, among other changes. Because statutory authority for the program had lapsed for a year, USDA determined that it had to reestablish regulatory authority through rulemaking in order to continue LMR operations. On May 16, 2008, USDA issued the final rule to reestablish and revise the mandatory reporting program. This rule incorporated the swine reporting changes and was intended to enhance the program's overall effectiveness and efficiency based on AMS's experience in the administration of the program. The rule became effective on July 15, 2008. Mandatory wholesale pork price reporting was not included in the original LMR act because the swine industry could not agree on reporting for pork. Section 11001 of the 2008 farm bill ( P.L. 110-246 ) directed USDA to study the effects of requiring packers to report the price and volume of wholesale pork cuts, which was a voluntary reporting activity at the time. The study was released in November 2009 and concluded that there would be benefits from a mandatory pork reporting program. On September 27, 2010, the President signed into law the Mandatory Price Reporting Act of 2010 ( P.L. 111-239 ), reauthorizing LMR through September 30, 2015. The act added a provision for LMR of wholesale pork cuts, directed USDA to engage in negotiated rulemaking to make required regulatory changes for mandatory wholesale pork reporting, and established a negotiated rulemaking committee to develop these changes. The committee was composed of representatives of pork producers, packers, processors, and retailers. The committee met three times, was open to the public, and developed recommendations for mandatory wholesale pork reporting. USDA released the final rule on August 22, 2012, and the regulation was implemented on January 7, 2013. The Agriculture Reauthorizations Act of 2015 ( P.L. 114-54 ) was enacted into law on September 30, 2015, extending LMR to September 30, 2020. P.L. 114-54 included amendments to swine and lamb reporting and addressed certain issues that livestock stakeholders had raised about LMR. (See " LMR Provisions Enacted in 2015 " below.) LMR Provisions Enacted in 2015 The Agriculture Reauthorizations Act of 2015 ( P.L. 114-54 ) extended LMR through September 30, 2020, and established the negotiated formula purchase reporting category for swine. A negotiated formula purchase is a purchase of swine based on a formula, negotiated on a lot-by-lot basis, in which the swine are committed to packers and scheduled for delivery no later than 14 days after the formula is negotiated. The enacted legislation also amended swine LMR by requiring the reporting of the low and high range of net swine prices to include the number of barrows and the number of gilts within the ranges and the total number and weighted average price of barrows and gilts. Lastly, the act requires that next-day reports include transaction prices that were concluded after the previous day's reporting deadlines. P.L. 114-54 amended lamb reporting regulations to redefine lamb importers and lamb packers . Importer is defined as an entity that imports an average of 1,000 metric tons (MT) of lamb meat per year during the immediately preceding four years. The original threshold was 2,500 MT. If an importing entity does not meet the volume limit, the Secretary of Agriculture may still determine that an entity should be considered an importer. Lamb packer is defined as an entity having 50% or more ownership in facilities, including federally inspected facilities, that slaughtered and processed an average of 35,000 head per year over the immediately preceding five years. The original threshold was 75,000 head. Also, the Secretary may consider other facilities to be packers based on processing plant capacity. Lastly, the reauthorization required USDA to study the price-reporting program for cattle, swine, and lamb. The study, to be conducted by AMS and the USDA Office of the Chief Economist, was directed to analyze current marketing practices and identify legislative and regulatory recommendations that are readily understandable; reflect current market practices; and are relevant and useful to producers, packers, and other market participants. AMS submitted the report to Congress in April 2018. The LMR Program LMR requires livestock buyers and sellers of meat products to report prices and other characteristics of their transactions. Ten types of transactions are reported for livestock, and each is described below. Several other marketing terms are defined in the text box following the description of transactions. Lastly, there is a discussion of LMR confidentiality requirements, AMS reporting, and enforcement measures. LMR Livestock Transaction Types Some types of transactions required under LMR are for specific livestock, such as cattle or swine, others cover all covered species. Negotiated purchase: a cash or "spot" market purchase by a packer of livestock from a producer under which the base price for the livestock is determined by seller-buyer interaction and agreement on a delivery day. Cattle are delivered to the packer within 30 days of the agreement. Swine are delivered within 14 days. Negotiated grid purchase (cattle): the negotiation of a base price, from which premiums are added and discounts are subtracted, determined by seller-buyer interaction and agreement on a delivery day. Cattle are usually delivered to the packer not more than 14 days after the date the livestock are committed to the packer. Forward contract: an agreement for the purchase of livestock, executed in advance of slaughter, under which the base price is established by reference to publicly available prices. For example, forward contracts may be priced on quoted Chicago Mercantile Exchange prices or other comparable public prices. Formula marketing arrangement: the advance commitment of livestock for slaughter by any means other than a negotiated or negotiated grid purchase or a forward contract using a method for calculating price in which the price is determined at a future date. Swine or pork market formula purchase: a purchase of swine by a packer in which the pricing mechanism is a formula price based on a market for swine, pork, or a pork product other than a future or option for swine, pork, or a pork product. Negotiated formula purchase (swine): a purchase of swine based on a swine/pork market formula that is negotiated lot-by-lot and scheduled for delivery and committed to the packer within 14 days of the negotiation. The sales are reported as producer- or packer-sold. Other market formula purchase: a purchase of swine by a packer in which the pricing mechanism is a formula price based on one or more futures or options contracts, and the sales are reported as producer- or packer-sold. Other purchase arrangement: a purchase of swine by a packer that is not a negotiated purchase, swine or pork market formula purchase, negotiated formula, or other market formula purchase and does not involve packer-owned swine. The sales are reported as producer- or packer-sold. Packer-sold swine: the swine that are owned by a packer (including a subsidiary or affiliate of the packer) for more than 14 days immediately before sale for slaughter and sold for slaughter to another packer. Packer-owned: livestock that packers (includes a subsidiary or affiliate of swine packers) own for at least 14 days immediately before slaughter. Information such as weight and dressing percent is reported on packer-owned livestock. Meat Transactions Meat packers are also required to report negotiated sales, formula sales, and forward contracts for boxed beef, boxed lamb, carcass lamb, and wholesale pork. Negotiated sales : a wholesale pork, boxed beef, or boxed lamb trade in which a price is determined by seller and buyer and is scheduled for delivery no more the 14 days from the date the price is established. Formula marketing arrangements: agreements in which the price is determined based on publicly available quoted prices. Forward sales: a wholesale pork, boxed beef, or boxed lamb sale in which the price is determined by seller and buyer and the delivery is scheduled beyond the time of a negotiate sale (over 14 days). Export sales: meats that are delivered outside the United States but not to Canada or Mexico. Livestock Transaction Data Figure 1 and Figure 2 show the monthly percentage since 2002 of cattle and swine purchases by transactions type. Both demonstrate the long-term declining trend in negotiated purchases and the move to formula-based purchases. In January 2002, almost 50% of cattle were traded on a negotiated basis, but negotiated purchases amounted to about 25% of purchases in May 2019. The declining trend in negotiated purchases in swine has gone from 17% in January 2002 to less than 2% in February 2019. AMS does not report the number of lambs sold on a formula basis because of confidentiality requirements. Throughout 2017 AMS was unable to report formula purchases in its National Weekly Lamb Report that included both lamb negotiated and formula purchases because of confidentiality requirements. AMS stopped publishing the report in December 2017. In 2016, about 40% of lambs were purchased on a negotiated basis and 60% on a formula basis. Currently, AMS reports the number of lambs, their weight and price range, and the weighted average price of purchased lambs on a negotiated basis, as well as comprehensive information that includes the average weight, net price, and dressing percent that combines negotiated and formula purchase information. Sufficient data are not available to publish all of the regular LMR transactions due to the limited number of transactions. Selected Reporting Requirements The text box above provides definitions of selected marketing terms that are used in LMR reports. The following sections discuss some of the main LMR reporting requirements, a description of confidentiality, and AMS reporting and enforcement of LMR. The complete LMR reporting requirements for cattle, swine, lamb, beef, pork, and lamb meat are in the LMR statute (7 U.S.C. Â§1635 et seq. ) and the LMR regulations (7 C.F.R. Part 59). LMR reports are available at the AMS Livestock, Poultry, and Grain Market News Portal . A description of selected reporting requirements under the LMR, and of the entities that are subject to them, follow. Packers that are subject to mandatory reporting are defined as federally inspected plants that have slaughtered a minimum annual average of 125,000 head of cattle, 100,000 head of swine, 200,000 head of sows and boars or a combination thereof, or 35,000 lambs during the immediate five preceding years. If a plant has operated for fewer than five years, USDA determines, based on capacity, if the packer must report. Packers are required to report the prices established for steers and heifers twice daily (10 a.m. and 2 p.m. central time), for cows and bulls twice daily (10 a.m. central for current day and 2 p.m. for previous-day purchases), barrows and gilts three times daily (7 a.m. central for prior-day purchases and 10 a.m. and 2 p.m. central), sows and boars once daily (7 a.m. central for prior-day purchases), and lambs once daily (2 p.m. central). Besides the established prices, packers report premiums and discounts and the type of purchase transactionâfor example, negotiated sales, formula sales, or forward contracts. Depending on the species, packers are required to report the quantity delivered for the day; the quantity committed to the packer; the estimated weight on a live weight basis or a dressed weight basis; and quality characteristics, such as quality grade. In addition to daily reporting, on the first reporting day of the week, packers file a cumulative weekly report of the previous week's purchases of steers, heifers, and swine. Lamb packers are required to report the previous week's purchases on the first and second reporting day of the week, depending on the data. Steer and heifer and lamb packers are to include data on type of purchase (negotiated, formula, or forward contract), premiums and discounts, and some carcass characteristics (e.g., quality grade and yield, average dressing percentage). Swine packers are required to report the amount paid in premiums that are based on noncarcass characteristics (e.g., volume, delivery timing, hog breed). Also, packers must provide producers a list of such premiums. In addition to livestock purchase prices, packers are required to report sales data for boxed beef, wholesale pork, and carcass and boxed lamb. Sales are reported twice daily for beef and pork and once daily for lamb. Packers are required to provide price, quantity, quality grade for beef and lamb, and type of cut. Packers must also report beef and pork domestic and export sales and domestic boxed lamb sales. Lamb importers who have imported a minimum average of 1,000 MT of lamb in the immediate four preceding years are required to report weekly lamb prices; quantities imported; the type of sale (negotiated, formula, or forward contract); cuts of lamb; and delivery period. Confidentiality The LMR law requires that price reporting be confidential to protect packer identity, contracts, and proprietary business information. In determining what data could be published, AMS initially adopted a "3/60" confidentiality guideline, which is commonly used throughout the federal government. Under 3/60, at least three entities must report in the regional or national reporting area, and no single entity may account for more than 60% of the reported market volume. Because of concentration in the livestock industry, AMS found that the "3/60" guideline resulted in large gaps in data reporting. For example, between April 2, 2001, and June 15, 2001, 24% of daily reports and 20% of weekly reports were not published because of confidentiality provisions. In order to address the data gaps, in August 2001 AMS adopted a "3/70/20" guideline, which requires that (1) at least three entities report 50% of the time over the most recent 60-day period, (2) no single reporting entity may account for more than 70% of reported volume over the most recent 60-day period, and (3) no single reporting entity may be the only reporting entity for a single report more than 20% of the time over the most recent 60-day period. These new guidelines eliminated most of the data gaps. AMS Reporting The Livestock, Poultry, and Grain Market News Division of the AMS Livestock, Poultry, and Seed Program is responsible for compiling and disseminating the information collected under LMR. It continues to operate a voluntary reporting program for livestock, poultry, and grain not covered under LMR. Under LMR, AMS publishes 24 daily cattle reports, 20 daily swine reports, and 2 daily lamb reports, and on a weekly basis, 21 cattle reports, 2 swine reports, and 3 lamb reports. It also publishes daily 6 boxed beef reports, 4 wholesale pork reports, and 1 boxed lamb and 1 lamb carcass report, and weekly 11 boxed beef reports, 10 wholesale pork reports, and 1 boxed lamb and 1 lamb carcass report. AMS also publishes 13 monthly cattle reports under LMR. According to AMS, LMR provides data for 78% of total slaughtered cattle, 94% of hogs, and 43% of sheep. For meat products, LMR covers 93% of boxed beef production, 87% of wholesale pork, and 43% of boxed lamb. Small operations that fall below required thresholds or nonfederally inspected meat packing facilities account for the remaining percentage of livestock slaughter and meat production. AMS market news operates on an annual appropriation of about $34 million, and the LMR program accounts for about $4 million of that amount. Enforcement AMS compliance staff enforces LMR through audits once every six months. AMS accomplishes this by reviewing support documentation for randomly sampled lots. AMS classifies noncompliance as major or minor violations. Major violations occur when packers do not submit information or submit incorrect information that affects the accuracy of reports. Minor violations are submissions that have typographical or data entry errors, for example, but have a minimal effect on report accuracy. If noncompliance is found, AMS will ask the packer to correct the problem. If the packer does not correct the problem, AMS may issue a warning letter and conduct additional audits. Ultimately, AMS could fine the packer $10,000 for each violation if corrective action is not taken. Packing plants have the right to appeal any noncompliance findings within 30 days of receiving a request for corrective action. In FY2015, AMS switched from quarterly plant visit reports to semiannual compliance reports on plant visits. For FY2018, AMS issued 369 noncompliance violations (270 major and 99 minor) during audits of 457 plants and 4,389 audited lots. Issues for Reauthorization in 2020 As part of the 2015 reauthorization study requirement, AMS held several meetings with cattle, swine, and lamb industry stakeholders to gather feedback on the LMR program. Stakeholders represented at the meetings included industry associations, farm groups, meat processors and food companies. In several cases AMS has already implemented reporting changes to address industry concerns. A common concern among stakeholders is the limited volume of the negotiated purchase market (see Figure 1 and Figure 2 ). Other concerns cited went to issues of confidentiality and the need for greater clarity in how transactions are categorized in reports. Some stakeholders want to see more detailed information on transactions, such as premiums, especially as pricing models evolve, as well as changes in reporting on the number of livestock committed to packers. The sections below provide summaries of the baseline study and stakeholder feedback. Baseline Study In response to the report requirements in the 2015 reauthorization, AMS commissioned a baseline study that explored underlying changes in the livestock and meat markets that affect LMR. The study's findings include the following: 1. Since LMR was established, the meatpacking industry has become more concentrated and vertically integrated. Many producers are also looking to vertical integration to remain competitive. 2. The industry is responding to domestic and global consumer meat demand with product differentiation and a mix of new products that did not exist when LMR began. 3. Livestock and meat are traded differently than they were 20 years ago as negotiated trades represent a smaller share of transactions, while formula pricing, forward contracts, and other arrangements comprise an increasing share of the total trade. 4. There are new platforms for pricing, such as internet auctions, that did not exist in early years of LMR. The industry is likely to continue to develop other platforms that vary greatly from traditional trading of livestock and meat. The study's authors concluded that the loss of LMR data during the 2013 government shutdown left the industry without a benchmark to accurately evaluate the markets. During the 2018-2019 shutdown AMS continued LMR reporting. Further structural changesâconcentration and integrationâin the livestock industry create challenges for confidentiality in reporting. In addition, the effectiveness of LMR as a means of providing relevant information for market participants may need to be assessed in the context of changes, such as introduction of branded or specialty programs that are not captured by LMR as it is currently structured. Also, with international trade in meat increasing, the inclusion of more market information on exported meat products could add to transparency in the market. Lastly, the study noted that timely AMS collaboration with the industry is crucial to the usefulness of LMR. Stakeholders in the cattle, swine, and lamb industries provided a range of comments and suggestions during their meetings with AMS, and these are summarized below. Cattle Industry Cattle stakeholders did not offer legislative recommendations to AMS but suggested changes to LMR reporting. AMS has already addressed some cattle stakeholder concerns. For example, cattle stakeholders raised concerns about how AMS reports delivery periods for negotiated purchases. A period of 15-30 days for deliveries was added in 2008, but AMS was unable to report data because of confidentiality guidelines. Instead data was reported as deliveries of 0-30 days. In response, AMS conducted a study of delivery periods, and in November 2017 it began reporting weighted average negotiated cattle prices for delivery periods of 0-14 and 15-30 days. AMS has also adjusted reporting so that negotiated purchases delivered beyond 30 days are separate from forward contract purchase. Some in the cattle industry expressed the need for greater reporting of committed cattle. For example, hog packers report each morning the number of hogs they have committed to take delivery of during the next 14 days. Conversely, some cattle stakeholders disagree that additional data on committed cattle is needed, pointing out that cattle market numbers are smaller than swine numbers, and therefore the information could be misleading. Swine Industry Stakeholders in the swine industry also expressed concern about the low volume of transactions in the negotiated markets. They were also skeptical about whether LMR can adequately capture market information related to changes in consumer preferences for porkâsuch as organic, antibiotic-free, raised without sow crates, or pork raised without the growth promoter ractopamine. In general, swine stakeholders also want AMS to report more noncarcass premiums, revise its reporting on the pork cutout (cut up parts of the carcass), and provide guidance on how transactions are categorized. Swine stakeholders offered the following six recommendations for legislative changes to LMR: 1. Remove the "negotiated formula purchase" definition and reporting requirement for swine that was included in the 2015 LMR reauthorization; 2. Amend the definition of non-carcass merit premium to more clearly differentiate the reporting requirements from premiums offered for carcass merit; 3. Define and report swine attributes, specifically addressing how attribute premiums, base prices, and net prices are reported by purchase type; 4. Amend the definitions of affiliate to lower the threshold of ownership or control to anything greater than 0 percent; 5. Add to reporting the volume of swine or pork market formula transactions that are priced on the pork carcass cutout; and 6. Remove the requirement for reporting wholesale pork on a free-on-board (FOB) Omaha basis. Wholesale pork is reported on an FOB plant basis and FOB Omaha basis, but most of the pork industry now uses FOB plant as the basis for pricing. Lamb Industry The U.S. sheep and lamb industry is a concentrated market that results in price-reporting challenges not necessarily experienced by the larger cattle and hog sectors. As a result, AMS is no longer able to publish lamb formula purchases because too few companies purchase the volume needed to meet reporting confidentiality guidelines. At the request of the lamb industry, AMS commissioned a study of lamb data and confidentiality. The study found that it is not feasible to relax confidentiality guidelines but suggested alternatives such as publishing a comprehensive report, which AMS has done, and developing a standardized pricing model that would produce a price based on the relationship of various reporting attributes. The lamb stakeholders raised concerns that AMS was not capturing price information for cooperative-owned lambs and for custom slaughtered lambs. AMS addressed the cooperative owned lamb issue in November 2017 by adding these lamb prices and their carcass weight information to its weekly sheep report. Under custom slaughter, ownership does not change. A producer's lambs are slaughtered on contract and are usually priced on a per-head basis. The lamb carcasses may then be sold to a lamb processor for fabrication (processing the carcasses into various cuts), but prices are not reported to AMS. Lastly, some stakeholders requested reporting of the number of lambs committed to be delivered to packers. However, the industry is not in agreement on reporting of committed lambs because of concern among some that this information would provide market information to import competitors. Lamb stakeholders involved in discussions with AMS proposed that three amendments be included in the reauthorization of LMR: 1. Lower the reporting threshold for lamb packers from 35,000 head per year on average to 20,000 head per year on average. 2. Define and require reporting of custom slaughtered lambs. 3. Define and require reporting of committed lambs. Congressional Interest LMR, as enacted and amended over the past 20 years, has increased market transparency for all market participants and livestock analysts. Livestock stakeholders have been generally supportive of LMR and its reauthorization over the years. The five-year reauthorization period has provided an opportunity for Congress to receive input from livestock stakeholders and evaluate whether or not the law and its implementation is fulfilling its purpose. This has proven especially critical when the industry is constantly changing and adapting to market and consumer demands. The 2015 reauthorization law that required that USDA provide a report to Congress on the LMR program offers a potential starting point for Congress to consider for possible 2020 reauthorization. Livestock stakeholders have offered specific proposals for Congress to consider should it choose to address reauthorization legislation. Other recommendations may be forthcoming. AMS regularly engages the livestock industry on LMR reporting issues and makes changes to reporting. During consideration of reauthorization, Congress may consider legislation to bolster LMR and whether AMS needs additional regulatory authority to address LMR issues. Stakeholders may have particular interest in adjusting confidentiality requirements for lamb reporting and expanding reporting requirements for certain attributes that address changing livestock markets.