Federal Issues Update
Lawmakers returned to Washington, D.C. this week following their
two-week spring recess to face a crowded legislative agenda. As
reported in the lead story, and in a victory for CSAC, the
president signed legislation (HR 2) on April 16 that extends the
Secure Rural Schools (SRS) program and also provides for a
continuation of several key health and human services programs.
In addition, the bill permanently corrects the Medicare program’s
physician payment formula (known as the “doc fix”). Additional
information on the new law can be found below.
On the appropriations front, the House Appropriations Committee
on April 13 released two of its fiscal year 2016 spending
measures: (1) Energy and Water Development; and (2) Military
Construction – Veterans Affairs. The Military Construction bill -
typically the least controversial of the 12 annual spending
measures – would provide $76.6 billion in discretionary funding
to house, train, and equip military personnel, provide housing
and services to military families, and help maintain base
infrastructure. The legislation also funds veterans’ benefits and
programs. It should be noted that the proposed funding amount is
$4.6 billion above the fiscal year 2015 enacted level, but $1.2
billion below what the president requested.
In total, the Energy-Water bill includes $35.4 billion in
discretionary spending – $1.2 billion above current spending and
$633 million below the administration’s budget request – for the
Army Corps of Engineers, Department of Energy programs, and other
related agencies. Of particular interest to counties, the bill
includes language that would block the Obama administration’s
proposed rule defining “Waters of the United States” (WOTUS). The
measure also would restrict the application of the Clean Water
Act in certain agricultural areas, including farm ponds and
irrigation ditches.
Both spending measures were approved by their respective
subcommittees on April 15 and will likely be considered by the
full Appropriations Committee next week. The committee will also
meet to approve subcommittee spending levels – known as 302(b)
allocations – for fiscal year 2016. Meanwhile, action on the
other 10 spending bills is expected in the coming weeks and
months.
In other developments, the House Transportation and
Infrastructure (T&I) Committee approved legislation (HR 1732)
this week that would require the Environmental Protection Agency
(EPA) and Army Corps to withdraw the proposed WOTUS rule within
30 days. In addition, the bill would require the agencies to
develop a new proposal with input from state and local officials.
Two Democrats joined Republicans in backing the measure sponsored
by T&I Committee Chairman Bill Shuster (R-PA) and Water
Resources and Environment Subcommittee Chairman Bob Gibbs (R-OH).
Incidentally, House Republicans introduced a similar bill (HR
594) earlier this year (HR 594 currently has 183 cosponsors).
The panel also adopted an amendment – offered by Representative
Jared Huffman (D-CA) – asserting that the federal government
would continue to defer to state authority on the development of
water law, water rights, and the legal system by which states
mediate disputes over water use. Although Huffman did not support
final passage of the underlying bill, he did stress the
importance of water rights to local economies in the
West.
In other news, 30 members of Congress were appointed this week to
a bicameral budget conference committee. Led by House Budget
Committee Chairman Tom Price (R-GA) and Senate Budget Committee
Chairman Michael Enzi (R-WY), the panel will work to resolve
differences between the House and Senate-passed fiscal year 2016
budget blueprints (H Con Res 27 and S Con Res 11). With much of
the negotiating work already complete by Price and Enzi, the
committee is expected to produce a budget conference agreement by
the end of the month.
Secure Rural Schools
The aforementioned “doc fix” legislation includes a long-awaited
extension of the SRS program – a top CSAC priority. Specifically,
the new law will provide payments to California counties for
fiscal year 2014 (retroactive) and fiscal year 2015. In addition,
the new law requires the U.S. Forest Service to provide the
fiscal year 2014 payment in a timely manner – within 45 days of
enactment. The fiscal year 2015 payment will be distributed early
next year.
In another effort to expedite the distribution of payments,
counties will not have the option (as they have in years past) to
elect whether to receive a share of timber harvest receipts
(25-percent payment) or a share of the SRS payment. Instead, the
election made by each county in fiscal year 2013 will carry
forward for fiscal years 2014 and 2015.
The SRS program provides a vital source of funding for rural
communities in California facing declining revenue from timber
sales on federal lands. These funds are used to maintain local
roads and schools, operate search and rescue missions, and
provide many other essential local services. Because SRS funding
expired last year, the most recent distribution of payments had
been guided by the Twenty-Five Percent Fund Act of 1908. The Act
essentially requires the federal government to share with states
25 percent of the receipts generated on national forest land.
While this model worked well for a number of years, declining
federal timber production and sales ultimately led to the
development of the SRS program.
Earlier this year, the U.S. Forest Service distributed
approximately $50 million to 746 timber counties under the 1908
law. Of the $50 million, California counties only received about
$8.7 million. By comparison, a little more than $300 million was
allocated under the SRS program last year, with $35.6 million
going to California counties. Furthermore, unlike SRS, the
25-percent payments do not allow states to allocate funds for
work similar to Title II (conservation work on national forests)
or Title III (county projects for Firewise programs, emergency
services or community wildfire protection plans).
It should be noted that the interaction between SRS and the
federal Payment-in-Lieu-of-Taxes (PILT) program is such that a
cut in SRS would have had a significant impact on fiscal year
2015 PILT payments. If Congress failed to extend SRS, a number of
California counties would have experienced a significant decline
in their PILT allocation this year.
Children’s Health Insurance Program
The new doc-fix law also includes a two-year extension of funding for the Children’s Health Insurance Program (CHIP/Healthy Families), which helps provide health coverage to children and pregnant women from low-income households. Without the enhanced federal funding provided through the program, California’s Health and Human Services Agency had estimated a loss of up to $533 million annually.
Home Visiting Program
Finally, the measure contains a two-year extension of funding for the Maternal, Infant, and Early Childhood Home Visiting Program. This program supports pregnant women and families and helps at-risk parents of pre-school children by using evidence-based, cost-effective models that improve maternal and child health, prevent child abuse and neglect, encourage positive parenting, and promote child development and school readiness. California received $22.6 million in fiscal year 2015 funding last month. As of February 2015, 21 California counties participated in the federal program.
Transportation Reauthorization
On the transportation reauthorization front, various proposals to
fund the Highway Trust Fund are beginning to surface on both
sides of the Capitol. In the upper chamber, Senators Barbara
Boxer (D-CA) and Rand Paul (R-KY) on April 16 introduced
legislation – the Invest in Transportation Act (S 981) – that
would help pay for a new long-term highway bill by offering
multi-national corporations a tax holiday on their overseas
earnings. Pursuant to the legislation, companies could
voluntarily bring home offshore profits at a tax rate of 6.5
percent, rather than the current 35 percent rate. All revenues
from the repatriation program would be transferred into the
Highway Trust Fund.
Across Capitol Hill, Representatives Jim Renacci (R-OH) and Bill
Pascrell (D-NJ) – along with 16 of their House colleagues – have
also introduced bipartisan legislation to address the impending
funding shortfall. Their bill – the Bridge to Sustainable
Infrastructure Act (HR 1846) – would index the federal gas tax to
inflation beginning next year. Unless Congress comes up with a
new funding solution within three years, the tax would continue
to rise. The bill also would establish a bipartisan, bicameral
transportation commission charged with identifying a way to come
up with a sustainable funding source for the Highway Trust
Fund.
The current surface transportation act (MAP-21), which is
operating under a short-term extension, is slated to expire on
May 31. If Congress does not reach a deal by then, the Department
of Transportation may be forced to withhold payments for
construction projects this summer. Due to a lack of consensus
over how to pay for a new long-term transportation bill, it is
very likely that Congress will need to pass another short-term
extension.