Update From Washington, D.C.
House Makes Continued Progress on FY 2021 Appropriations
July 30, 2020
The House is on pace to approve a second fiscal year 2021 spending package (HR 7617) by the end of the week. Once approved, the lower chamber will have advanced all but one of the annual funding measures. While the House has made considerable progress in recent weeks, partisan disagreements over funding levels, as well as a number of major policy disputes between the two parties, will likely bog down negotiations on the FY 21 budget going forward.
Across Capitol Hill, Senate appropriators have yet to put pen to paper and have no immediate plans to begin their markups. Complicating matters even further, both chambers will soon recess for the entire month of August. At this stage, it’s a near certainty that a short-term Continuing Resolution (CR) will be needed before current funding for federal departments and agencies expires on September 30.
Financial Services
Of particular interest to California’s counties, the Financial Services title of HR 7617 includes a provision that would prohibit funds from being used to penalize financial institutions that provide banking services to a state-legal cannabis business. This would apply to manufacturers, producers, and any individual who participates in a business or organized activity that involves handling hemp, hemp-derived CBD products, cannabis, cannabis products, or cannabis proceeds. It should be noted that this provision is similar to but not as robust as the protections included in CSAC-endorsed legislation – the SAFE Banking Act (HR 1595; S 1200).
Transportation-Housing and Urban Development (T-HUD)
The T-HUD title of HR 7617 would provide $75.9 billion in discretionary funding for programs within the purview of the Department of Transportation (DOT), the Department of Housing and Urban Development (HUD), and related agencies. It should be noted that this funding is $1.7 billion more than current levels and $16.8 billion above the Trump administration’s budget request. In total, the legislation would provide $158.3 billion in discretionary and mandatory spending.
In addition to base funding levels, the bill would provide a $75 billion in emergency spending to support the economic recovery from the coronavirus pandemic. Of that amount, $26 billion would be designated for DOT programs, including $3 billion for discretionary BUILD grants, $2.5 billion for airports, $5 billion for Consolidated Rail Infrastructure, and $5 billion for Capital Investment Grants. The remaining $49 billion in supplemental spending would be directed to HUD programs, including $4 billion for the CDBG program, $300 million for the CHOICE Neighborhoods Initiative, and $17.5 billion for the HOME Investment Partnerships program, among other things.
Consistent with House-passed infrastructure legislation (HR 2), HR 7617 would increase funding for surface transportation programs by more than $20 billion. The measure also would eliminate any requirements that states match federal funds for most of the programs subject to the obligation limitation.
Finally, the legislation blocks the administration’s public housing rule targeting undocumented immigrants, which, if finalized, could impact citizens and legal residents who reside in mixed status households.
Commerce-Justice-Science (CJS)
The CJS title of the legislation would provide $71.5 billion in FY 21 discretionary budget authority – which is $1.7 billion below the FY 20 enacted level – for the Department of Justice (DOJ), the Department of Commerce, and related agencies. The reduction is largely due to the completion of the 2020 Decennial Census. It should be noted that the measure would create several new grant programs, which were initially proposed in the Democrats’ policing reform legislation – the George Floyd Justice in Policing Act (HR 7120). Among other things, the bill would increase funding for the DOJ Civil Rights Division and for FBI investigations of law enforcement patterns and practices; the measure also would put limitations on federal grant funds to incentivize reform at the state and local level.
As a precondition of receiving any FY 21 Justice Department funds, the legislation requires state and local law enforcement agencies to begin or complete the process of obtaining accreditation from a certified law enforcement accreditation organization. This would apply to programs such as COPS hiring grants and Byrne-Justice Assistance Grants (JAG). The bill also requires at least 25 percent of a recipient’s Byrne-JAG formula funds to be spent in specified ways aimed at improving police practices.
With regard to cannabis, the legislation includes language – often referred to as the Rohrabacher-Farr rider – that prohibits federal funding from being used to prosecute individuals or businesses that are acting in compliance with state-legal medical marijuana laws.
Homeland Security
The Homeland Security title of the bill would provide $50.7 billion in discretionary funding, which is approximately $12 billion below current levels. The legislation also would provide an additional $5.1 billion in funding for disaster relief and $215 million for overseas contingency operations – neither of which would count towards the discretionary budget caps. It should be noted that the legislation would rescind nearly $1.4 billion from Customs and Border Protection’s (CBP) Procurement, Construction, and Improvements account, the amount appropriated in FY 20 for border wall construction. This is a direct response to the Trump administration’s previous diversion of funding from the Department of Defense for the border wall.
Of particular interest to California’s counties, the committee report that accompanies the legislation directs FEMA to expeditiously implement several provisions of the Disaster Recovery Reform Act (DRRA), which the agency has yet to act on, including a provision that would provide assistance to state and local governments for building code implementation and enforcement. FEMA also has yet to define the terms “resilient” and “resiliency,” which the agency is required to do under the DRRA.
Labor-Health and Human Services
The legislation would provide $196.5 billion in funding for programs within the Department of Labor, the Department of Health and Human Services (HHS), and the Department of Education. This represents an increase of $2.4 billion above FY 20 levels and $20.8 billion above the president’s budget request. In addition, the bill would provide $24.4 billion in emergency spending to help support state and local public health departments, among other things. Additionally, the measure includes $5 billion in emergency funding to ensure that HHS is able to respond quickly and aggressively to a broad range of public health threats. With regard to Unemployment Insurance, HR 7617 would provide $2.6 billion, which would be $109 million above the FY 20 funding level. The measure also includes $925 million in emergency contingency funding to help States address spikes in unemployment claims.
Energy and Water Development
HR 7617 includes $49.6 billion in discretionary spending for the Department of Energy, the U.S. Army Corps of Engineers, and the Bureau of Reclamation. This level of funding represents an increase of $1.26 billion, or three percent more than the FY 20 enacted level.
The measure also would provide an additional $43.5 billion in emergency spending, with $23.5 billion dedicated for the Department of Energy and $17 billion to accelerate work on Army Corps projects around the country. In addition, $3 billion in supplemental funding would be available to accelerate work on Reclamation projects, including $67 million for WIIN Act water storage projects, $300 million for WaterSMART grants, $50 million for Title XVI projects, $200 million to restore the conveyance capacity of the Friant-Kern Canal, $100 million for rural water projects, $250 million for the Central Valley Project Improvement Act, and $250 million for CALFED, among other things.