Federal Issues update 3/28/2014
After a one week recess, lawmakers returned to Washington, D.C., on March 24 to face a crowded budget agenda. On both sides of the Capitol, appropriations panels held more than two dozen budget and oversight hearings throughout the week. The hearings provided cabinet secretaries, military service chiefs, and other high-ranking administration officials with the opportunity to outline their respective budget proposals to Congress.
With top-line spending levels already set for fiscal year 2015, lawmakers have been more focused on what policy provisions to attach to the annual appropriations bills, an effort that could delay several of the more controversial spending measures. However, with the November elections in sight, leaders in both chambers are unlikely to call up legislation containing provisions that force challenging votes for their politically vulnerable members.
Looking ahead, both chambers are focused on clearing all 12 of the annual spending bills by the time the new fiscal year begins on October 1. For his part, House Appropriations Committee Chairman Harold Rogers (R-KY) has announced that the Military Construction – Veterans Affairs and the Legislative Branch Subcommittees will mark up their respective spending measures next week. These two bills are generally considered the least controversial of the annual spending bills, and as such, they will likely be the first considered on the House floor in the coming months. Across Capitol Hill, the Senate Appropriations Committee is expected to hold its first markup on May 22, and Senate Majority Leader Harry Reid (D-NV) has reserved four weeks of floor time this summer to consider the various spending measures.
State Criminal Alien Assistance Program (SCAAP)
This week, Representatives Linda Sanchez (D-CA), Gary Miller (R-CA), and Mike Honda (D-CA) authored a bipartisan Dear Colleague letter to House appropriators on SCAAP funding. The letter, which was drafted by CSAC, requests $255 million for SCAAP in fiscal year 2015. This level of funding is consistent with the fiscal year 2013 enacted level and $75 million more than the fiscal year 2014 enacted level. While the funding level is not ideal, it may be the best scenario under the current budget circumstances. It should be noted that the administration’s budget for fiscal year 2015 does not include funding for SCAAP.
In addition, CSAC has submitted written testimony to the Commerce-Justice-Science Appropriations Subcommittee which requests additional funding for SCAAP in fiscal year 2015. The statement also urges the subcommittee to address several key SCAAP-related issues to ensure that jurisdictions are adequately reimbursed for the costs of incarcerating undocumented criminals.
Property Assessed Clean Energy (PACE) Programs
In other news, Representatives Mike Thompson (D-CA), Peter King (R-NY), and Sean Patrick Maloney (D-NY) introduced legislation this week – the PACE Assessment Protection Act of 2014 (HR 4285) – that would revive stalled residential PACE programs nationwide. The bill, which has been endorsed by CSAC, would direct the Federal Housing Finance Agency (FHFA) to rescind policy guidance that has severely hampered residential PACE programs. The directive from the Agency, which was issued in 2011, objects to local governments holding the first lien on residential PACE homes, calling it a significant risk to Fannie Mae and Freddie Mac. To address FHFA’s concerns, the legislation would establish important national program standards to limit any and all financial risk to Fannie Mae and Freddie Mac.
In a related development, the state of California recently finalized emergency regulations to implement a PACE Loss Reserve Fund. The state-backed fund would ensure that PACE assessments are paid off in the event of a mortgage default, which would effectively eliminate any financial risk to Fannie Mae, Freddie Mac, or any other mortgage lender. Among other things, the regulations would require PACE programs enrolling in the reserve fund to meet basic structural criteria and comply with certain underwriting standards, similar in scope to the language included in the PACE Assessment Protection Act.
The new regulations, as well as a program summary and application, can be found here.
As reported in the lead article of this week’s Legislative Bulletin, the U.S. Army Corps of Engineers (Corps) announced March 24 that local flood control agencies will no longer be required to remove trees and other vegetation from levees in order to qualify for federal disaster assistance. The policy reversal represents a major victory for CSAC, which has worked closely with key members of the California congressional delegation in pushing for modifications to the Corps’ one-size-fits-all policy.
Under the previous policy, local levee sponsors and flood control districts were required to remove all vegetation from levees, except grass, to allow for easier inspections and to reduce potential weakening of levees through root growth and overturned trees. Notably, the Corps’ own research on this topic has indicated that minimal data exists on the scientific relationship between vegetation and levees. Nevertheless, levees not in compliance with the vegetation policy were deemed ineligible for federal funding in the event of a disaster.
The Corps’ standards, which were implemented in 2009, created a number of major challenges for local governments and flood control agencies. For starters, the cost of implementing the directive was estimated to be in the billions of dollars nationwide. In California alone, the Department of Water Resources estimated that the minimum cost of complying with the vegetation removal policy was roughly $7.5 billion.
Additionally, the Corps’ policy was often in direct conflict with federal and/or state laws that prohibit the removal of vegetation on levees, particularly when the vegetation provides habitat for endangered species. The policy had the effect of putting county officials in the untenable position of choosing between removing vegetation – and potentially violating environmental laws and regulations – or leaving vegetation in place and foregoing eligibility for post-disaster federal relief.
Under the Corps’ new “interim” policy, any vegetation rating generated for a particular levee will be used for informational purposes only and will no longer be a factor when determining eligibility for disaster relief funding. The Agency’s policy is expected to be made permanent via a formal rulemaking process.
It should be noted that the Corps’ shift in policy is occurring just as Congress is in the process of finalizing water resources legislation (S 601/HR 3080) that would require the Agency to undertake a comprehensive review of its levee vegetation removal guidelines. The statutory language, sought by CSAC and championed by Representative Doris Matsui (D-CA) and Senators Barbara Boxer (D-CA) and Dianne Feinstein (D-CA), will likely remain in the final water resources bill in order to ensure that the new interim policy is made permanent.
In other developments, the U.S. Environmental Protection Agency (EPA) and Army Corps of Engineers announced on Tuesday, March 26 a proposed rule that would clarify the definition of “waters of the United States” under the Clean Water Act (CWA). The proposal would define which waterways are subject to federal regulation by the two agencies (the Corps, along with State governments, process permits for work that is performed in the nation’s waterways, while EPA enforces the nation’s pollution laws).
The scope of the CWA became a political flashpoint in the mid 2000s following two key Supreme Court decisions (Rapanos v. United States and SWANCC v. Army Corps of Engineers) that left uncertainty regarding which bodies of water are subject to federal regulation. In the wake of the Court’s action, policymakers at all levels of government, along with various industry officials and environmental groups, have sought a rulemaking to provide clarity.
According to EPA, the proposed rule would not protect any new bodies of water that have not historically been covered under the CWA. The proposed rule includes in the definition of “waters of the United States” a number of waterways, including traditional navigable waters, interstate waters, tributaries of traditional navigable waters, and adjacent waters and wetlands. The rule also states that other bodies of water could be regulated if such bodies have a “significant nexus” to other traditional waterways. It is unclear how significant nexus would be defined, though EPA has indicated that the Agency will do so when the rule is published.
Critics of the proposed rule, including many local governments and key members of Congress, have charged that the proposed rule would vastly expand EPA’s regulatory reach, thus resulting in delays to both public works projects and private development. Several members of Congress have already vowed to block the proposed rule by developing legislation that would reverse EPA’s proposal.
At press time, the proposed rule had not yet been published in the Federal Register. Stakeholders will have 90 days from the date of publication to submit comments.