Update from Washington, D.C.
House Approves Stopgap Funding Measure; Committee Staff Unveil Family First Transition Legislation
September 19, 2019
In an effort to avert a government shutdown on October 1, the House today approved a short-term Continuing Resolution (CR). Among other things, the legislation (HR 4378) would extend funding for federal agencies through November 21, giving lawmakers an additional two months to negotiate fiscal year 2020 spending levels. It also would extend several programs that are slated to expire at the end of the fiscal year, including the National Flood Insurance Program (NFIP) and the Temporary Assistance for Needy Families (TANF) program.
As part of the bipartisan agreement, Democrats agreed to fund an Agriculture Department program that has provided mitigation payments to farmers affected by the ongoing trade war with China. In exchange, the administration would be required to provide Congress with a report detailing the damage caused by the retaliatory tariffs, listing the impact by state and commodity.
While there was talk of including language in the CR that would have canceled a $7.6 billion cut in unobligated Federal-aid highway contract authority that is scheduled to take effect next year, such a provision did not make it into the bill. Absent congressional action, the Federal Highway Administration (FHWA) will need to recalculate each state’s highway funding to reflect a budget rescission that was included in the previous transportation reauthorization law (FAST Act). According to FHWA, the rescission for California amounts to just over $693 million. Looking ahead, the fiscal year 2020 Transportation-Housing and Urban Development spending bill could serve as a vehicle to cancel the impending funding loss.
Across Capitol Hill, the Senate will now have one week to review and finalize the CR before Congress adjourns for its next scheduled recess, and all indications are that GOP leaders will support the stopgap measure. While this is a positive development, it still remains to be seen whether an agreement can be reached on a full year appropriations package. In fact, the Senate this week failed to advance a four-bill minibus funding measure (HR 2740) that provides fiscal year 2020 spending levels for Defense, Labor-Health and Human Services, Energy and Water Development, and State-Foreign Operations.
While HR 2740 remains in a holding pattern, the Senate Appropriations Committee this week made progress on three more fiscal year 2020 spending bills. On September 19, the panel approved funding levels for its Transportation-Housing and Urban Development (T-HUD), Agriculture, and Financial Services funding measures. Despite progress at the committee level, it is unclear when, or if, these bills will be considered by the full chamber.
House and Senate Panels Unveil Family First Transition Legislation
This week, staff representing the House Ways and Means Committee and the Senate Finance Committee reached a bipartisan agreement on draft legislation to help ease the transition toward implementation of the Family First Prevention Services Act (FFPSA). Enacted last year as part of the Bipartisan Budget Act of 2018 (PL 115-123), FFPSA complicated California’s efforts to reform the state’s child welfare system via the Continuum of Care Reforms enacted under AB 403. In addition, and of particular concern to a number of counties in California, the new law did not address the imminent expiration of federal child welfare (Title IV-E) waivers.
Title IV-E is the major federal funding mechanism for foster care, used by county and state child welfare agencies to cover costs associated with the care and supervision of children in foster homes. Seven counties in California – Alameda, Los Angeles, Sacramento, San Diego, San Francisco, Santa Clara, and Sonoma – are currently using a program waiver to support a broader range of activities and services. However, that authority is slated to expire at the end of September, and absent a legislative solution, these counties will lose their waiver and the resulting federal funding.
The proposed legislation would provide an additional two years of funding for waiver counties at a slightly lower level of reimbursement. Pursuant to the agreement, all waiver states and counties in fiscal year 2020 would receive at least 90 percent of the amount they negotiated under their waiver in the previous year. A second tranche of funding would be provided in fiscal year 2021 at an amount not less than 75 percent of the fiscal year 2019 waiver level.
In addition, the bill would provide $500 million in one-time, flexible transition funding to all states, regardless of when they opt in to implement FFPSA. Funds would be allocated based on the formula used to distribute child welfare funding (under IV-B, Part 1 of the Social Security Act). Notably, no match would be required to draw down the funds.
Looking ahead, House and Senate leaders have indicated their support for the draft proposal, and the measure is expected to be attached to a larger legislative vehicle later this fall. Recognizing that the waiver authority will likely end prior to the passage of such legislation, funding for the transition and the waiver provisions would be retroactive to October 1, 2019.
For its part, CSAC is working with committee staff to ensure the timely passage of the legislation. It should also be noted that CSAC was an early supporter of a similar bill (S 107) – sponsored by Senators Dianne Feinstein (D-CA) and Marco Rubio (R-FL) – that would extend the waiver funding for two years.
FY 2020 Transportation-HUD Appropriations
As previously indicated, the Senate Appropriations Committee approved its fiscal year 2020 T-HUD spending bill on September 19. All told, the legislation would provide $74.3 billion in budgetary resources, or a $3.2 billion increase compared to current funding levels.
With regard to the Department of Transportation, the bill includes $46.3 billion for the Federal-aid Highway Program, which is consistent with the levels authorized by the FAST Act. Additionally, the measure would provide $2.7 billion in discretionary funding for highways, with a significant percentage of those funds set aside for the Surface Transportation Block Grant. The legislation also includes $1 billion for the Better Utilizing Investments to Leverage Development (BUILD) grants, or a $100 million increase.
For public transportation programs, the bill would provide $13 billion for the Federal Transit Administration, of which $10.1 billion would come from the Mass Transit Account of the Highway Trust Fund (consistent with the FAST Act). Additionally, the legislation includes nearly $2 billion for Capital Investment Grants, as well as $560 million in discretionary funding for transit infrastructure grants.
In the area of housing and community development, the Senate bill would provide $3.3 billion for HUD’s Community Development Block Grant (CDBG), or level funding, as well as $1.3 billion for the HOME Investment Partnerships Program, which represents a $50 million increase. The measure also includes $2.8 billion for Homeless Assistance Grants, or a $164 million boost in budgetary resources.
Looking ahead, the T-HUD spending bill, along with a number of other pending appropriations measures, could advance to the floor of the Senate before the end of the month.
Trump Administration Announces Formal Repeal of WOTUS Rule
On September 12, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of the Army (Civil Works) announced the formal repeal of the Obama-era “Waters of the United States” (WOTUS) regulation. In its place, the agencies are recodifying the regulatory framework that existed prior to the imposition of the 2015 rule. The official repeal, which has been in the works since the early days of the Trump presidency, will become effective 60 days after publication in the Federal Register.
According to EPA, rescission of the WOTUS rule represents the first step in a two-part process aimed at providing stakeholders with certainty regarding which bodies of water ultimately fall under the regulatory purview of the federal government. The second step – publication of a final replacement rule – is expected to occur sometime in 2020. Earlier this year, EPA and the Army Corps released a draft WOTUS replacement rule that, in broad terms, would restrict the agencies’ regulatory authority to those waters that are “physically and meaningfully” connected to traditional navigable waters.
The latest action by the Trump administration follows years of ongoing litigation over the 2015 WOTUS rule. Incidentally, multiple lawsuits are expected to be filed in response to the Trump administration’s WOTUS rewrite.
Long-Term PILT Renewal Proposed in Senate
Earlier this week, a bipartisan group of lawmakers – led by Senator Ron Wyden (D-OR) – introduced legislation (S 2480) that would reauthorize mandatory funding for the Payment in Lieu of Taxes (PILT) program. PILT payments help offset losses in tax revenues due to the presence of tax-exempt federal land in their jurisdictions. With nearly 44 million acres of eligible federal lands, California counties, as a whole, generally collect the highest allocation of PILT funding in the nation. In fact, earlier this year, 57 California counties received $51.7 million in program funding.
While Congress has been able to fully fund PILT in recent years through discretionary spending, the uncertainties associated with the federal budget could put future funding at risk. Under the legislation, the program would become a mandatory entitlement for a period of ten years. This would guarantee full funding to eligible counties over that time and provide counties with long-term budget certainty.
While the Congressional Budget Office has yet to analyze the fiscal impact of the legislation on the federal ledger, the measure should easily exceed $6 billion. Without an identified funding offset, it is unlikely that S 2480 will move in the near-term. Despite the funding challenges, PILT remains a priority for CSAC. Therefore, the association supports the legislation and will urge California Senators Dianne Feinstein and Kamala Harris to cosponsor.