Update From Washington, D.C.
House Appropriators Advance Half of Fiscal Year 2022 Spending Bills; Senate Panel Approves Infrastructure Proposal; House Agriculture Committee Approves $43 Billion Broadband Proposal; Cannabis Legalization Proposal Introduced in Senate
July 15, 2021
House Appropriators Advance Half of Fiscal Year 2022 Spending Bills
House appropriators are on pace to advance six fiscal year (FY) 2022 spending bills this week, including those covering Transportation-Housing and Urban Development (T-HUD); Energy and Water Development (E&W); Commerce-Justice-Science (CJS); Labor-Health and Human Services (Labor-HHS); Homeland Security; and, Defense. Following the expected action on Friday, the committee will have approved all 12 appropriations measures, clearing them for floor consideration in the coming weeks.
To follow are select highlights:
Transportation-Housing and Urban Development
The FY 2022 T-HUD spending bill would provide a total of $84.1 billion in discretionary funding – an increase of $8.7 billion from current levels – for programs within the purview of the Departments of Transportation (DOT) and Housing and Urban Development (HUD). This includes an increase of $6.8 billion for HUD and $1.9 billion for DOT. In total, the legislation provides $162.6 billion in discretionary and mandatory spending.
Among other provisions, the bill includes $1.2 billion for DOT’s RAISE grant program (previously referred to as TIGER/BUILD grants), which represents an increase of $200 million from the fiscal year 2021 enacted level. On the housing side of the ledger, the measure proposes significant funding increases for a number of HUD programs, including $3.7 billion for the Community Development Block Grant (CDBG) program (+$265 million), $1.85 billion for the HOME Investment Partnerships Program (+$500 million), and $3.4 billion for Homeless Assistance Grants (+$420 million). The bill also includes $50 million for a new down payment assistance program to help first-time, first generation homebuyers purchase a home. A summary of the legislation is available here, and the text can be accessed here.
Energy and Water Development
The FY 2022 E&W spending bill would provide $53.2 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 nearly $1.5 billion from current spending. Among other provisions, the bill provides $8.7 billion for the Army Corps, which is $1.9 billion above the president’s budget request. The measure also would provide a total of $1.95 billion (+$276 million) for the Bureau of Reclamation, including $413 million in additional funding for water resources projects, $191.4 million for WaterSMART programs (+$62.4 million), and an additional $55.7 million for rural water projects. A summary of the bill can be accessed here, and the text of the measure is available here.
The FY 2022 CJS bill includes $81.3 billion, which is $10.2 billion above the fiscal year 21 enacted level. The legislation funds the Department of Justice (DOJ), the Department of Commerce, and other related agencies. Pursuant to the legislation, DOJ would receive just over $36 billion in discretionary funding, an increase of $2.64 billion above current levels.
With regard to individual programs, the Byrne Justice Assistance Grant program and the COPS Hiring grant program would be funded at current levels ($360.1 million and $156.5 million, respectively). However, as a precondition to receiving these grants, state and local governments would need to comply with nine conditions aimed at improving police practices. This includes eliminating racial profiling, banning chokeholds, and ending “no-knock” warrants in drug cases. The legislation also proposes a new requirement that at least 25 percent of each recipient’s Byrne JAG formula funds be spent on improving police practices. The measure would also provide funding for several new grant programs, which were initially proposed in the Democrats’ policing reform legislation – the George Floyd Justice in Policing Act (HR 1280) – which passed the House earlier this year. A summary of the bill is available here, and the text of the draft bill can be found here.
Labor-Health and Human Services
The FY 2022 Labor-HHS spending bill would provide $253.8 billion in funding for programs within the Departments of Labor, Health and Human Services, and Education. This represents an increase of $55.2 billion above current levels. Among other provisions, the bill would provide significant investments in public health infrastructure, including $1 billion in new, flexible funding for public health infrastructure and capacity nationwide; $150 million (+$100 million) to modernize public health data surveillance and analytics at state and local health departments; $106 million (+$50 million) in public health workforce initiatives; and, $715 million (+$20 million) for public health emergency preparedness cooperative agreements. A summary of the bill is available here, and the text can be accessed here.
Senate Panel Approves Infrastructure Proposal
On Wednesday, the Senate Energy and Natural Resources (ENR) Committee approved a draft infrastructure bill – the Energy Infrastructure Act – that includes titles addressing grid infrastructure and resiliency, clean energy technology, energy efficiency, wildfire risk reduction, and western water infrastructure. It should be noted that several areas of this legislation reflect portions of the infrastructure framework that President Biden and a bipartisan group of senators recently announced.
With regard to the western water investments, the legislation would provide a total of $8.3 billion for, among other things, water storage and conveyance projects ($1.15 billion), water recycling ($1 billion), desalination ($250 million), rural water ($1 billion), and dam safety ($500 million). This title also includes $3.2 billion to address aging infrastructure and $300 million for the Drought Contingency Plan.
With regard to wildfire risk reduction, the bill would authorize $3.37 billion over four years for the Department of the Interior and USDA/Forest Service to conduct various forest management activities (i.e., hazardous fuels reduction, controlled burns, community wildfire defense grants, landscape forest restoration projects, and additional firefighting resources). The bill also includes $5 billion for utilities to bury power lines and install fire-resistant technologies to reduce wildfires.
Finally, it should be noted that the panel adopted a bipartisan amendment – sponsored by Senators James Risch (R-ID) and Ron Wyden (D-OR) – that would reauthorize the Secure Rural Schools (SRS) program for an additional two years. The program, which is currently expired, provides assistance to rural counties and school districts affected by the decline in revenue from timber harvests on federal lands.
Looking ahead, the path forward on infrastructure remains unclear, though the full Senate is expected to advance a broad package of “traditional” infrastructure investments in the coming weeks. From there, the chamber will develop a separate bill that would authorize the president’s non-traditional infrastructure proposals embodied in the American Families Plan.
House Agriculture Committee Approves $43 Billion Broadband Proposal
On July 14, the House Agriculture Committee unanimously approved a $43 billion proposal (HR 4374) that seeks to improve broadband access to rural communities through a combination of federal grants, loans, and loan guarantees. Specifically, HR 4374 would formally establish the new ReConnect Rural Broadband Program, which has operated as a pilot program since fiscal year 2018. Pursuant to the legislation, the pilot would continue to operate until 2022, at which point the program would receive $4.5 billion annually through 2030.
In addition, the measure would authorize $300 million annually between fiscal year 2022 and fiscal year 2030 to carry out projects through the Innovative Broadband Advancement Program, which funds the growth of broadband technologies that significantly cut deployment costs and boost broadband speeds in rural areas. Despite its inclusion in previous iterations of the Farm Bill, the initiative has never received an appropriation from Congress.
HR 4374 also would bolster funding for several of USDA’s rural development programs, providing $150 million for Community Connect Program grants for unserved areas. It would offer another $150 million for Distance Learning and Telemedicine program grants and loans, which aid rural education and health care entities in reaching students and patients remotely.
Finally, the legislation would authorize $300 million annually for the Middle Mile Infrastructure Program, which constructs and improves broadband infrastructure connecting rural service providers with internet backbone networks.
Looking ahead, the proposal will likely be considered in the context of broader infrastructure negotiations.
Cannabis Legalization Proposal Introduced in Senate
On July 14, Senate Majority Leader Chuck Schumer (D-NY) unveiled a comprehensive cannabis reform proposal – the Cannabis Administration and Opportunity Act – that would legalize and regulate the drug at the federal level. Specifically, the draft bill, which is co-sponsored by Senators Cory Booker (D-NJ) and Ron Wyden (D-OR), would require the U.S. Attorney General to remove cannabis from federal drug schedules under the Controlled Substances Act within 60 days of the bill’s enactment. Beyond ending the prohibition on cannabis, the discussion draft would expunge nonviolent federal cannabis-related criminal records and creates a pathway for resentencing.
The bill also would impose a federal tax on cannabis products with the proceeds designated for various programs in communities that have been the most impacted by drugs. The tax would start at 10 percent in the first year, gradually increasing to 25 percent in the fourth year. Starting in the fifth year post-enactment, the tax would be a “per-ounce or per-milligram of THC amount determined by the Secretary of the Treasury equal to 25 percent of the prevailing price of cannabis sold in the United States in the prior year.” Small cannabis businesses – defined as those with less than $20 million in sales annually – would be eligible for a 50 percent reduction in their tax rate.
The Cannabis Administration and Opportunity Act also lays out a structure for how businesses would be approved and regulated. Additionally, the measure would transfer regulatory authority over cannabis from the Drug Enforcement Administration (DEA) to the Food and Drug Administration (FDA), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the Alcohol and Tobacco Tax and Trade Bureau (TTB).
Finally, it should be noted that the sponsors of the bill have made clear they are open to suggestions for how the draft proposal can be improved. Interested parties are encouraged to submit comments to Cannabis_Reform@finance.senate.gov by September 1. The full text of the legislation can be accessed here.