Federal Issues Update 6/20/2014
Returning from a weeklong recess on June 9, the House had its legislative agenda temporarily altered after House Majority Leader Eric Cantor (R-VA) was defeated in his June 10 primary election. Representative Cantor, whose shocking loss was to a college economics professor with no political experience, is the first majority leader ever to fall in primary defeat. After Cantor announced his intention to step down from his leadership position effective July 31, the House GOP began immediate preparations for filling Cantor’s post.
As anticipated, the House Republican Conference on June 19 elected current majority whip Kevin McCarthy (R-CA) to replace Cantor as majority leader. Subsequent to elevating the third-ranking Republican to the number-two spot, the conference voted Republican Study Committee Chairman Steve Scalise (R-LA) to be McCarthy’s successor as whip. According to the official House calendar, once McCarthy and Scalise assume their new posts, there are only 12 scheduled legislative days before the fall midterm elections. At that point, all GOP leaders will once again stand before their colleagues for reelection to their current positions.
Despite the unexpected leadership turmoil, House lawmakers continued to press ahead with an aggressive appropriations schedule. On June 10, the chamber approved its fiscal year 2015 Transportation-Housing and Urban Development (T-HUD) funding bill on a nearly party-line vote of 229-192. Providing a total of $52 billion in discretionary spending (approximately $1.2 billion above current levels), the measure (HR 4745) is considerably smaller than its $54.4 billion companion legislation (S 2438) in the Senate. Among other things, the bill proposes to spend $41 billion for highway programs and $10.5 billion for transit programs.
The House last week delayed votes on its Agriculture appropriations measure (HR 4800), which includes controversial language that would allow some schools to temporarily opt out of higher nutrition standards. In its place, the chamber brought a fiscal year 2015 Defense spending bill (HR 4870) to the floor, which members are expected to pass on June 20. In total, the defense measure would provide $491 billion in discretionary funding, an increase of $4.1 billion above current levels.
At the committee level, the House Appropriations panel approved its fiscal year 2015 Department of Homeland Security (DHS) bill, as well as its Energy and Water Development legislation. Of particular interest to counties, the Energy and Water bill includes language that would prevent the U.S. Army Corps of Engineers from funding any activities associated with implementing its “Waters of the U.S.” rule. The proposed rule would likely significantly expand those waterways that would be subject to federal regulation under the Clean Water Act. During committee markup, an amendment that would have stripped the bill of the funding prohibition was defeated on an 18-31 vote.
The proposed rule, as originally published in the Federal Register on April 21, was open for public comment until July 21. However, the U.S. Environmental Protection Agency (EPA) and the Corps announced on June 10 that the public comment period would be extended to October 20. It should be noted that CSAC, along with a number of other stakeholders, requested the 90-day extension to allow sufficient time for local governments to analyze and comment on the proposal. CSAC, with the assistance of the County Engineers Association of California (CEAC), will be submitting comments prior to the deadline.
In addition, the House Transportation and Infrastructure Committee’s Water Resources and Environment Subcommittee held a hearing on June 11 to examine the potential impacts of the proposed rule. Testifying on behalf of NACo was Warren “Dusty” Williams, general manager and chief engineer for Riverside County’s Flood Control and Water Conservation District. His testimony and a webcast of the hearing can be found here.
Across Capitol Hill, appropriations momentum has stalled in the Senate as Majority Leader Harry Reid (D-NV) on June 19 pulled a three-in-one spending package from the floor after lawmakers were unable to reach an agreement on amendments. The $126.2 billion measure (HR 4460) incorporates the Senate’s fiscal year 2015 Commerce-Justice-Science (S 2437), T-HUD (S 2438), and Agriculture (S 2389) appropriations bills. Additional setbacks came earlier in the week when the Appropriations Committee postponed two of its fiscal year 2015 funding measures – Energy and Water Development and Labor-Health and Human Services – leaving an uncertain future for the remainder of the chamber’s appropriations process.
The traditionally noncontroversial Energy and Water spending bill was delayed after the White House threatened to veto the measure. The administration’s concerns stem from an expected amendment from Minority Leader Mitch McConnell (R-KY) that would block the recent carbon standards rule proposed by EPA.
In other legislative developments, the House Judiciary Committee approved legislation – the Permanent Internet Tax Freedom Act (HR 3086) – that would permanently prohibit state and local governments from taxing Internet access. The current moratorium is set to expire on November 1, 2014.
Prior to its consideration, CSAC and the League of California Cities sent a letter to the committee in support of an amendment by Ranking Member John Conyers (D-MI) that would limit the moratorium to four years, as opposed to permanently extending it. However, the committee rejected the Conyers amendment, and overwhelmingly approved HR 3086 by a vote of 30-4. It should be noted that Representative Judy Chu (D-CA), who serves on the panel, spoke in support of the Conyers amendment and was one of the few members to oppose the permanent moratorium.
Payments in Lieu of Taxes
On June 17, the Department of the Interior (DOI) announced that it will be distributing approximately $436.9 million – the largest amount ever allocated – in fiscal year 2014 Payments-in-Lieu-of-Taxes (PILT) payments to nearly 1,900 local governments. Counties in California will receive approximately $45.3 million this year, compared to $41.4 million in fiscal year 2013. A full list of funding by state and county can be found here.
It should be noted that this is the last year that full funding is authorized for the PILT program. Accordingly, unless Congress acts, PILT will revert to a discretionary program and will be subject to the annual appropriations process. As a result, future annual payments could be significantly reduced. Incidentally, DOI’s funding announcement encouraged lawmakers to extend mandatory PILT funding for another year, while Congress continues to work on a long-term solution.
Carcieri v. Salazar/Indian Fee-to-Trust Reform
On June 11, the Senate Committee on Indian Affairs approved legislation (S 2188) that would overturn the U.S. Supreme Court’s Carcieri v. Salazar decision. In Carcieri, the Court ruled that the secretary of the Interior’s trust land acquisition authority is limited to those tribes that were under federal jurisdiction at the time of the passage of the Indian Reorganization Act of 1934 (IRA). During the committee’s consideration, the panel adopted an amendment by Vice Chairman John Barrasso (R-WY) that would direct that secretary of Interior to conduct a study on the effects of the Carcieri decision on Indian tribes and tribal land.
As part of his opening remarks, Chairman Jon Tester (D-MT) acknowledged that some of his colleagues in the Senate still have issues with the legislation; accordingly, he pledged to work with those members going forward. Absent agreement on next steps, S 2188 will not advance to the floor of the Senate. For its part, CSAC continues to work with Senator Dianne Feinstein (D-CA) and others in an effort to ensure that meaningful reforms in the Indian fee-to-trust process are part of any Carcieri “fix” legislation.
House Republican leaders recently announced that they have set aside their plan to reduce Saturday postal deliveries as a way to temporarily shore up the Highway Trust Fund (HTF). According to the Department of Transportation (DOT), revenues flowing into the HTF are expected to drop below a critical level by the end of July. Such a scenario could severely limit the federal government’s ability to reimburse states for construction projects this summer.
Incidentally, the aforementioned proposal was not well received by rank-and-file members and was opposed by a number of conservative groups. House Republicans are now exploring other options to pay for a short-term HTF patch, including several pension-related revenue raisers.
Looking ahead, there are efforts on both sides of the Capitol to develop a plan that would make the trust fund solvent for multiple years. In fact, Senators Chris Murphy (D-CT) and Bob Corker (R-TN) this week unveiled a proposal to raise the federal gas tax – which has not been increased since 1993 – by 12 cents per gallon over the next two years and indexing it to inflation. To appeal to conservatives, the Murphy-Corker plan would make permanent a number of temporary tax breaks. While the two senators hope to build support for their plan over the summer, it is unlikely to be considered prior to the November elections.
Similarly, the nation’s highway and transit law (MAP-21) is not expected to receive a long-term reauthorization prior to the fall elections. As a result, lawmakers would need to pass an extension – or series of short-term extensions – to ensure continued programmatic authority for the Act, which is slated to expire on October 1.