Federal Issues Update
June 7, 2018
FY19 Appropriations Process Continues
Lawmakers continued to make progress on the fiscal year 2019 budget this week as the House began debate on its first combined spending package (HR 5895). As of this writing, the “minibus” appropriations measure – which includes the Energy and Water, Military Construction, and Legislative Branch spending bills – is still being considered on the House floor.
The Energy and Water title of the minibus funds the Department of Energy, the U.S. Army Corps of Engineers, the Bureau of Reclamation, and several independent agencies. Specifically, HR 5895 would provide $44.7 billion in fiscal year 2019, or $1.5 billion above the fiscal year 2018 enacted level and $8.2 billion above President Trump’s budget blueprint. Notably, the Army Corps would see its budget increase by over $450 million, while an additional $75 million would be available for the Bureau of Reclamation.
In addition, the bill includes $134 million for water storage projects authorized in the Water Infrastructure Improvements for the Nation (WIIN) Act. With regard to California, the federal funds could be used for the following projects: design and pre-construction work on the Shasta Reservoir project; feasibility study completions for the Sites Reservoir and the Temperance Flat Reservoir; and, initiation of a feasibility study to address subsidence on the Friant Kern Canal.
The legislation also includes a number of so-called policy riders, including language that would rescind the controversial Waters of the United States (WOTUS) rule. It should be noted that the Environmental Protection Agency (EPA) and the Corps are currently in the process of repealing and replacing the WOTUS rule through the regulatory process. In fact, according to the latest regulatory agenda released by the Trump administration, the agencies plan to issue a proposed rule in August with a final rule expected by September 2019.
Prospects for passage of the minibus appear to be dimming as Democratic leaders are urging their members to oppose final passage and hold out for a better deal that includes more funding for Democratic priorities, as well as fewer policy riders. If Democrats are unified in their opposition to HR 5895, GOP leaders will be hard pressed to advance the bill, unless they are able to receive support from the conservative House Freedom Caucus.
Prior to floor consideration of HR 5895, the Rules Committee blocked a bipartisan amendment – sponsored by Congressman Earl Blumenauer (D-OR) – that would allow qualified veterans to access state-legal medical cannabis. Under current law, the Department of Veterans Affairs (VA) specifically prohibits its medical providers from recommending medical marijuana. The Blumenauer amendment would have prohibited federal funding from being used to enforce this rule.
It should be noted that this is the second year in a row that the committee has not permitted the amendment to move forward. While the language was approved by the House in 2016, the rider was ultimately dropped from the final legislation.
On June 7, the Senate Appropriations Committee unanimously approved its fiscal year 2019 Transportation-Housing and Urban Development (HUD) spending measure. In total, the legislation reflects an allocation of $71.4 billion in discretionary spending – $1.1 billion more than the fiscal year 2018 enacted level and $23.4 billion above the Trump administration’s budget request.
Pursuant to the spending bill, $46 billion from the Highway Trust Fund would be available for the Federal-aid Highway program, which is $1 billion above the fiscal year 2018 level and on par with the funding authorized by the Fixing America’s Surface Transportation (FAST) Act. In addition, the legislation would provide an extra $3.3 billion in discretionary highway funding, including $90 million to eliminate hazards at railway-highway grade crossings and $800 million for bridge repairs. The measure also would provide $1 billion for the multimodal BUILD program (formerly known as TIGER grants).
With regard to community planning and development, the bill includes $7.8 billion for various HUD activities and programs, or approximately $99 million above the fiscal year 2018 enacted level. The measure would fund the Community Development Block Grant (CDBG) program at $3.3 billion, equal to the fiscal year 2018 spending level. Additionally, the legislation would provide $1.2 billion for the HOME Investment Partnerships Program, or a slight boost in funding. Homeless Assistance Grants would be slated for an increase under the Senate bill as well, with the program receiving $2.6 billion (+$133 million).
On June 7, the House considered legislation (HR 3) that would rescind nearly $15 billion in unspent federal funding. While the Trump administration initially sought to cancel over $60 billion in spending – with the majority of cuts coming from the recently enacted fiscal year 2018 omnibus appropriations law (PL 115-141) – GOP congressional leaders dismissed the broader plan. In response, the White House sent lawmakers a scaled-back request that would rescind unspent funds from previous fiscal years.
The administration further revised the request after concerns were raised that certain cuts to mandatory programs could trigger a 60-vote threshold in the Senate. The revised measure, which withdrew four proposals and modified six others, will only require a simple majority for passage in both chambers. While the House is expected to clear the bill later today, its Senate prospects remain unclear. Republicans currently hold a 51-49 majority, so any defections could imperil the bill if Democrats remain unified. If Republicans are ultimately successful in their efforts to claw back the unspent funding, the White House could follow-up with additional rescission requests in the coming months.
On June 6, the House overwhelmingly approved a bipartisan Water Resources Development Act (WRDA) reauthorization measure. The legislation (HR 8) would authorize a number of flood control, navigation, ecosystem restoration, and other water resources projects under the purview of the U.S. Army Corps of Engineers, including several projects in the state of California.
While HR 8 is primarily a project-level authorization bill, the legislation includes several other features, including long-term reauthorizations of the National Levee Safety Initiative and the National Dam Safety Program. Additionally, the bill includes language that would require the Corps to provide non-federal stakeholders with the opportunity to provide input and recommendations on the development and issuance of any new or revised WRDA implementation guidance.
The House WRDA measure also includes language that would require the secretary of the Army to enter into an agreement with the National Academy of Sciences to convene a committee of experts to carry out a comprehensive study on the potential effects of moving the Corps’ civil works function from the Department of Defense to a new or existing agency or sub-agency of the federal government.
Across Capitol Hill, the Senate Environment and Public Works Committee approved in late May its own bipartisan water infrastructure bill (S 2800). In addition to a number of project authorizations, the legislation would revamp the process by which the Corps’ prepares its budget. Under the bill, the Corps would be required to submit to Congress on an annual basis a five-year budget that includes a work plan for the current fiscal year and a proposed budget for the subsequent four-year period. While Corps headquarters would be responsible for submitting a budget that addresses projects and initiatives of national significance, each district office would be required to provide a plan for projects of regional, tribal, and local significance.
S 2800 also includes provisions designed to increase local and non-federal stakeholder input in the Corps’ budgeting process. Additionally, the measure would change cost-sharing rules to allow a state, local government, or private entity that splits the cost of an Army Corps project to be entitled to a partial reimbursement of their contribution if the project comes in under budget.
While the majority of provisions in the Senate’s water infrastructure bill pertain to the Corps, the legislation also would make modifications to several key programs that are administered by the EPA. For example, S 2800 would expand authorized activities under the Safe Drinking Water Act State Revolving Loan Fund (SRF) to allow states to use up to 10 percent of their SRF capitalization grants to implement source water protection plans. Additionally, the legislation would reauthorize the Water Infrastructure Finance and Innovation Act (WIFIA).
Looking ahead, the Senate is expected to consider its WRDA reauthorization measure sometime this summer.