June 2, 2016

There was a flurry of activity on Capitol Hill the week of May 23rd as lawmakers made progress on an array of issues in the lead-up to this week’s Memorial Day recess.  House and Senate appropriators, in particular, were busy shepherding a number of the fiscal year 2017 spending bills to various stages of the legislative process.  All told, nine of the 12 annual funding measures are in the play in the House while eight spending bills are active in the Senate.

It should be noted that several of the appropriations measures considered thus far include controversial policy riders that could ultimately derail this year’s budget process.  For instance, the House last week failed to adopt its fiscal year 2017 Energy and Water (E&W) Development spending bill due to disagreements over inclusion of a provision that would provide certain protections for the LGBT community.  The appropriations stalemate marked the second time in two weeks that lawmakers have fought over LGBT policies on the House floor.  Looking ahead, it’s unclear how House GOP leaders plan to address the matter, which has created a divide within the Republican conference. 

Aside from the annual spending legislation, lawmakers also continued to press ahead on other big-ticket items, including a wide-ranging energy bill (S 2012), various measures that would impact the Temporary Assistance for Needy Families (TANF) program, and legislative efforts aimed at addressing the ongoing drought in California.

Appropriations: Energy and Water Development

As indicated above, the House last week was unable to pass its fiscal year 2017 E&W spending package (HR 5055).  The measure, which would provide $37.4 billion in funding for programs under the purview of the Department of Energy, the U.S. Army Corps of Engineers, the Bureau of Reclamation, and related agencies, was rejected by a vote of 112 to 305.  While many Republicans opposed the inclusion of the aforementioned LGBT language, most Democrats opposed the legislation due to the bill’s programmatic spending levels and other extraneous policy riders.

Of particular interest to California, the legislation includes provisions that are designed to allow additional water to be pumped from the Sacramento-San Joaquin Delta to the parched Central Valley.  The language – which largely tracks drought-relief legislation that passed the lower chamber in 2015 (HR 2898, Rep. Valadao) – would require the Interior Department to increase Delta water exports under certain conditions.

While the drought-related provisions are strongly supported by Central Valley Republicans, the language has drawn intense fire from Democrats who charge that increased pumping would cause irreversible damage to the Delta.  The stark contrast in views regarding the management of California’s water system was on full display during last week’s floor debate on the E&W spending bill, which featured largely partisan exchanges between members of the state’s congressional delegation.

The House bill also includes language that would prohibit the Army Corps from spending any funds to implement the Obama administration’s controversial “Waters of the United States” (WOTUS) regulation.  Additionally, the measure would prevent the Corps from making any changes to the definition of “fill material” and “discharge of fill material” for the purposes of the Clean Water Act (CWA).

As expected, the aforementioned provisions – as well as other policy riders – have drawn the ire of the White House.  In a Statement of Administration Policy (SAP) released earlier last week, the White House expressed its strong opposition to, among other things, the sections of HR 5055 that deal with California water policy.  According to the administration, the bill would undercut the Endangered Species Act and limit application of court-approved biological opinions.  The SAP also states that the bill would preempt California State water law and, if enacted, would actually impede an effective and timely response to the continuing drought while providing no additional water to hard hit communities.  According to the administration’s statement, if President Obama were presented with the bill, his senior advisors would recommend that he veto the measure. 

In the upper chamber, senators approved their own version of the E&W spending legislation (S 2804) on May 12.  The measure does not include provisions mandating additional pumping from the Delta.  However, the Committee Report accompanying the bill (S Rept. 114-236) directs the Bureau of Reclamation and the Department of the Interior to use all of the flexibility at their disposal to mitigate the impacts of the drought, particularly through the use of comprehensive, real-time monitoring of drought conditions and their impact on endangered species and rely upon the best available science when managing export pumping rates.

The Senate legislation also includes $100 million for various Western drought-relief programs and activities.  Championed by Senator Dianne Feinstein (D-CA), the funds would build upon the $100 million that was included for various drought-response programs as part of the fiscal year 2016 omnibus spending law.

Appropriations: Commerce-Justice-Science; Transportation-Housing and Urban Development

On May 24, the House Appropriations Committee approved two of its fiscal year 2017 spending bills: Transportation-Housing and Urban Development (T-HUD) and Commerce-Justice-Science (CJS).  The CJS bill would provide $56 billion in total discretionary funding to the Departments of Commerce and Justice, NASA, and related agencies.  The proposed investment is $279 million more than the fiscal year 2016 enacted level and $1.4 billion above the president’s budget request.

With regard to funding for state and local law enforcement assistance, the House bill would provide nearly $1.2 billion in fiscal year 2017 – a level that is roughly $227 million below current spending and $83 million more than proposed in the administration’s budget.  In a victory for California’s counties, the bill would provide an additional $64 million for the State Criminal Alien Assistance Program (SCAAP), increasing its total appropriation to $274 million.

The CJS bill also would provide level funding ($425 million) for core Byrne-Justice Assistance (Byrne/JAG) grants.  While the legislation does not include funding for the COPS hiring grant program, it would provide $75 million for initiatives to improve police-community relations and an additional $75 for the Comprehensive School Safety Initiative.

With regard to the T-HUD package, the bill would allocate $44 billion from the Highway Trust Fund for the Federal-aid Highway Program ($905 million above current spending).  The proposed funding – which supports local road, bridge, and safety projects – mirrors the levels authorized in last year’s highway reauthorization measure (FAST Act).

The legislation also would provide $450 million for the Department of Transportation’s discretionary TIGER Grant program, or $50 million below current spending.  The grants are awarded to states and local governments for infrastructure construction and improvements.  In addition, the House T-HUD bill includes $12.5 billion for the Federal Transit Administration, which is $743 million above the fiscal year 2016 enacted level but $7.4 billion below the administration’s budget request.  Transit formula grants would total $9.7 billion, which is consistent with FAST Act authorization levels.

Finally, the legislation would provide level funding ($3 billion) for the Community Development Block Grant (CDBG) program and the HOME Investment Partnerships Program ($950 million).  While the Appropriations Committee rejected the Obama administration’s request for a large infusion of mandatory spending for homeless assistance programs, the committee did provide an additional $237 million for Homeless Assistance Grants, increasing the total appropriation for the program to $2.5 billion.

Appropriations: Interior-Environment

On May 25, the House Appropriations Subcommittee on Interior and Environment approved its fiscal year 2017 spending bill.  The measure would provide nearly $32.1 billion ($64 million below the fiscal year 2016 enacted level and $1 billion less than the administration’s request) in discretionary spending for the Department of the Interior, the Bureau of Land Management (BLM), the U.S. Forest Service, EPA, and related agencies.

In a major victory for California’s counties, the legislation includes $480 million to fully fund the federal Payments-in-Lieu-of-Taxes (PILT) program.  In addition, the measure would increase funding for wildland firefighting and suppression programs, as well as hazardous fuels management.  The bill also would make available $50 million in loans for the new Water Infrastructure Finance and Innovation (WIFIA) program.

As expected, the House bill also contains a number of extraneous policy riders that are designed to hamper the White House’s environmental agenda.  Like the E&W spending measure, the Interior bill would bar the Obama administration from implementing its WOTUS rule or from making changes to the definition of fill material for permitting purposes under the CWA.

House Republican Drought Bill Added to Energy Policy Legislation

Last Wednesday, the House passed a wide-ranging energy policy measure (HR 8/S 2012) that contains the text of more than three-dozen separate pieces of legislation, including the aforementioned GOP drought bill.  The drought language and other bills were added to the underlying energy legislation as a single amendment package by virtue of a vote in the House Rules Committee.

House approval of the energy bill paves the way for a conference committee with the Senate, which recently passed its own energy legislation.  Looking ahead, House and Senate leaders will need to decide which members of their respective chambers will serve as conference negotiators.

With regard to the California drought package, it is unclear whether the language will survive the conference process.  While House Republicans will be pushing hard to retain the provisions, Democrats will be working to remove them from the bill.

House Transportation Committee Approves WRDA Reauthorization

Last week, the House Transportation and Infrastructure Committee approved by voice vote a Water Resources Development Act (WRDA) reauthorization bill.  The legislation (HR 5303) would authorize funding for a number of Corps projects that have received Chief’s Reports since passage of the last WRDA bill in 2014.

The legislation also includes language that would expand the definition of water-resources projects to include “environmental infrastructure” projects, which would allow the Corps to directly participate in various water supply and water recycling projects.  Additionally, the bill would allow the Corps to enter into agreements with non-federal sponsors to engage in water conservation, stormwater capture, and groundwater recharge projects.

It should be noted that the House WRDA bill is less ambitious than its Senate counterpart (S 2848).  The Senate measure, which was approved last month by the Environment & Public Works Committee, would authorize broad federal assistance and financial support for drinking water and wastewater infrastructure upgrades, drought resilience, green infrastructure programs, etc., and would make several updates to the WIFIA program.

Senate Environment Committee Holds Hearing on WOTUS

The Senate Environment and Public Works Committee’s Fisheries, Water, and Wildlife Subcommittee held a hearing on May 24 entitled “Erosion of Exemptions and Expansion of Federal Control – Implementation of the Definition of Waters of the United States.”  The panel heard testimony from witnesses representing a number of key interests, including farming and agriculture, recreation, academia, and the homebuilding industry.

The Senate hearing represents just the latest effort by Senate Republicans and certain stakeholders to highlight what they consider to be major deficiencies with the administration’s WOTUS rule.  According to a representative of the American Farm Bureau Federation, EPA and the Corps have continued to expand the scope of their regulatory reach under the CWA through implementation of the WOTUS rule despite a federal appeals court ruling that stayed the regulation.  

House Ways and Means Committee Advances TANF Legislation

The House Ways and Means Committee held two recent markups on portions of the Temporary Assistance for Needy Families (TANF/CalWORKs) program.  While the committee has not yet undertaken a full review and reauthorization of TANF, the six bills they did pass would affect state and county administration of the program.  

Most notably, the committee adopted a bipartisan bill (HR 2990) that would create a $100 million subsidized employment grant program for TANF recipients.  States would apply for the demonstration grants to draw down a 50 percent wage match from the federal government for public or private employers hiring TANF recipients.  Available for up to one year, the grants could support employment for a number of individuals, including youth up to age 24, non-custodial parents, and those individuals whose income is less than 200 percent of the poverty level.

The Ways and Means Committee also adopted legislation (HR 2959) that would limit and grandfather the ability of states to claim third-party expenditures of community-based organizations and others as the state’s financial match in order to draw down federal TANF funds.  Other bipartisan bills include a measure (HR 5169) to direct the Department of Health and Human Services to evaluate the success of activities funded by state TANF programs and provide federal matching grants to states who wish to evaluate certain aspects of their program.  A federal clearinghouse of effective programs would be created by HHS and the Department of Labor.  Another bill (HR 5170) adopted by the committee would establish a federal initiative to support social impact demonstration projects. 

In addition, the Committee advanced legislation (HR 2952) along party lines that would establish new performance standards on states to measure the percentage of TANF recipients who have left the program and are working.  This includes measures that would require states to track individuals at the half and full-year mark after leaving TANF, using metrics that resemble those under the Workforce Innovation and Opportunity Act (WIOA).

Looking ahead, the bills face an uncertain future.  In addition, Democrats have called on GOP leaders to consider other measures that were included in a 2015 discussion draft which, among other provisions, would increase the allowable time that TANF recipients may spend in vocational education, as well as the ability of states to count part time work toward meeting the federal work participation requirements.