Friday, March 22, 2013 The CSAC Bulletin
Federal Update
Ahead of a two-week congressional recess, lawmakers cleared legislation (HR 933) this week that will fund the federal government through September 30, 2013. The measure adheres to the budget caps established by the 2011 Budget Control Act (BCA) and locks in most of the cuts under sequestration. It would set discretionary spending authority for the year at about $984 billion after the sequester is taken into account. This is down from $1.043 trillion in fiscal year 2012.

In addition, the stopgap spending bill will provide regular appropriations for the Departments of Defense, Veterans Affairs, Justice, Agriculture, Commerce, Homeland Security, the Food and Drug Administration, the National Science Foundation, and NASA. Taken together, more than two-thirds of the discretionary funding for 2013 would be subject to relatively detailed appropriations as opposed to a straight continuation of fiscal year 2012 funding levels.

It should be noted that the measure would provide additional funding for certain programs of interest to California's counties, including the State Criminal Alien Assistance Program (SCAAP). Under the bill, SCAAP would be funded at $255 million, or a $15 million increase over the fiscal year 2012 level. While several other justice accounts also are in line for spending increases, such as the Byrne Justice Assistance Grant (JAG) program and the Community Oriented Policing Services (COPS) program, the bill would transfer the proposed increases to certain subaccounts, thus holding funding levels for these programs steady.

In the area of transportation, the spending package honors the highway and transit funding levels called for under last year's Moving Ahead for Progress in the 21st Century Act (MAP-21). The original House bill did not adhere to the inflationary increases that were approved as part of MAP-21.

With spending levels set for fiscal year 2013, lawmakers shifted their focus toward the budget for fiscal year 2014. The House on March 21 approved a budget proposal (H Con Res 25) sponsored by Budget Committee Chairman Paul Ryan (R-WI). The resolution - which seeks to balance the budget in 10 years - calls for reducing projected spending by $4.6 trillion through cuts to domestic programs, repealing the 2010 health care law, and overhauling the tax code.

Incidentally, there are relatively few policy changes compared to the GOP's 2013 budget blueprint. Like last year, the House budget proposes to replace the current fee-for-service Medicare program with a voucher-like system, beginning in 2024. In addition, the budget recommends transforming the Medicaid and food stamp programs into block grants to states.

As of this writing, the Senate Democratic budget proposal (S Con Res 8), sponsored by Chairwoman Patty Murray (D-WA) was being debated in the upper chamber. Under Murray's plan, the 10-year budgetary timeframe would end with a $566 billion deficit. It would, however, reduce the overall deficit by roughly $1.85 trillion through a mix of spending cuts and tax increases. Unlike Ryan’s budget, the Democratic plan includes a replacement of the sequester in its deficit reduction estimate.

Because of the stark contrasts between the House and Senate budget resolutions, there is a strong likelihood that the two chambers will be unable to produce a final fiscal year 2014 budget blueprint. In the absence of a final budget resolution, the House and Senate Appropriations Committees will set their own top-line spending levels for fiscal year 2014.

On a related matter, the Obama administration is scheduled to unveil its fiscal year 2014 budget the week of April 8. Although the president, by law, is required to issue his budget on the first Monday in February, the administration has indicated that a number of fiscal uncertainties - including the end of year fiscal cliff deliberations - has forced the White House to delay the release of its budget.

Levee Vegetation

On Wednesday, March 20, the Senate Environment and Public Works (EPW) Committee unanimously approved a reauthorization of the Water Resources Development Act (WRDA). The legislation (S 601), sponsored by the chairwoman of the EPW Committee, Senator Barbara Boxer (D-CA), would implement a number of key water resources reforms under the purview of the U.S. Army Corps of Engineers.

Among other things, the legislation includes a section on vegetation management, which would require the secretary of the Army to conduct a comprehensive review of the Corps’ levee vegetation removal policy. In conducting the review, the secretary would need to consult with other applicable entities, including representatives of state and local governments, federal agencies, and appropriate nongovernmental agencies.

In addition, the secretary would be required to consider whether the national guidelines can be amended to promote and allow for consideration of variances from the guidelines on a Statewide, tribal, regional or watershed basis, a key reform promoted by CSAC. The legislation would require the secretary to base variances on such factors as: soil conditions, hydrologic factors, vegetation patterns and characteristics, environmental resources, levee performance history, any scientific link between vegetation and levee safety, the availability of limited funds for levee constructions and rehabilitation, etc.

The bill also would require the secretary to solicit and consider the views of the National Academy of Engineering and the National Academy of Sciences as part of the policy review process.

CSAC has worked closely with Chairwoman Boxer and the EPW Committee on the levee vegetation provisions of S 601. Incidentally, the vegetation section that the committee approved on March 20 was strengthened and improved in comparison to a similar section that was included in a draft WRDA bill that was released by the committee last November.

According to Senate Majority Leader Harry Reid (D-NV), he would like to bring the WRDA legislation to the floor as early as April. Although WRDA has historically been a biennial package, Congress has not approved a new reauthorization bill in six years.

Clean Water Act – Section 404 Permitting

On Wednesday, March 20, Congressman Gary Miller (R-CA) reintroduced legislation - the Flood Control Facility Maintenance Clarification Act (HR 1296) - that would provide a narrow exemption for maintenance removal of sediment, debris, and vegetation from flood control channels and basins under Section 404 of the Clean Water Act (CWA).

Under Section 404, counties, local flood control agencies, and similar local government agencies are required to obtain permits from the U.S. Army Corps of Engineers (Corps) for the discharge of dredged or fill material into navigable waters. The CWA also provides a permitting exemption for the maintenance of currently serviceable structures. However, the Corps has determined that this exemption does not apply to certain routine maintenance activities.

The narrow interpretation of the law adopted by the Corps has caused a number of unintended consequences, including drastically increasing the Corps’ workload and creating a significant permitting backlog. The processing time for a 404 permit can take from one to three years and often comes with costly mitigation conditions attached. It also has hampered local agencies in their efforts to perform routine maintenance in a timely and responsive manner, leaving them open to undue liability for flood damage.

CSAC has worked closely with Congressman Miller on HR 1296 and has endorsed the legislation. Several Members of the California congressional delegation are original cosponsors of the bill.

Secure Rural Schools (SRS) / Payment In Lieu of Taxes (PILT)

The Senate Committee on Energy and Natural Resources held an oversight hearing March 19 to examine the options and challenges related to the reauthorization of SRS and PILT. Senator Ron Wyden (D-OR), who chairs the committee, reaffirmed his commitment to reauthorize both programs.

With regard to SRS, Wyden called on the U.S. Forest Service to increase timber harvests on federal land but stressed the need to do it in a way that is consistent with existing environmental laws. Furthermore, Wyden acknowledged that increased timber harvests alone would not be enough to make up for lost SRS payments, so he also vowed to pursue "fresh approaches" for funding rural communities.

Testifying on behalf of the Forest Service, Chief Thomas Tidwell informed the committee that SRS would be subject to a 5.1% cut under sequestration. This announcement has drawn criticism from key members of Congress, who argue that the SRS payments made earlier this year were part of the fiscal year 2012 budget cycle, and thus, not subject to the across-the-board cuts.

Despite these complaints, the Forest Service is in the process of informing counties of potential options to recover the necessary funds. According to Chief Tidwell, Title I and Title III payments have already been made, but Title II payments to Resource Advisory Committees (RACs) have not yet been distributed. With that in mind, one option being considered by the administration is to subtract the full sequestered amount from Title II payments. The other options could include repayment of funds or some other type of reduction to county payments.

It should be noted that the House and Senate budget resolutions for fiscal year 2014 would create a deficit neutral reserve fund for rural counties and schools. If approved, this would allow the Budget Committee chairmen to revise the budget resolution to accommodate legislation reauthorizing SRS and PILT. Similar language was included in the last two House budget resolutions (fiscal years 2012 and 2013).

Property Assessed Clean Energy (PACE) Program

Earlier this week, the Ninth Circuit Court of Appeals reversed a previous ruling on PACE and dismissed the lawsuit against the Federal Housing Finance Agency (FHFA). The court held that FHFA’s decision to cease purchasing mortgages on PACE-encumbered properties was a lawful exercise of its statutory authority as conservator of Freddie Mac and Fannie Mae. The previous ruling by the District Court for the Northern District of California required FHFA to go through a formal rulemaking process on its PACE actions. While the Agency could still conceivably continue with its rulemaking, it is no longer mandatory.

In light of the Ninth Circuit’s decision, Representative Mike Thompson (D-CA) is considering reintroducing legislation that would prevent FHFA from adopting policies that contravene established state and local PACE laws. Legislation introduced in the 112th Congress - the PACE Assessment Protection Act - also established underwriting guidelines that would limit or, in some cases, eliminate any risk to lenders. It should be noted that the two primary Republican sponsors of the previous measure - Representatives Nan Hayworth (R-NY) and Dan Lungren (R-CA) - were both defeated in the 2012 elections. In the interest of bipartisanship, Thompson is in the process of identifying a new Republican sponsor.

Native American Affairs

On March 19, the House Natural Resources Committee’s Indian and Alaska Native Affairs Subcommittee held an oversight hearing on authorization, standards, and procedures for whether, how, and when Indian tribes should be newly recognized by the federal government. Assistant Secretary for Indian Affairs Kevin Washburn was on hand to provide the administration's views on the federal recognition process.

During the hearing, Subcommittee Chairman Don Young (R-AK) reiterated his support for legislation that would overturn the 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 (IRA) of 1934. Young, however, stated that he would only support a so-called "clean fix" as long as it did not include Alaska tribes.

The Bureau of Indian Affairs has declined to approve land-into-trust applications for Alaska tribes ever since the Supreme Court's 1998 decision in Alaska v. Native Village of Venetie. The court held that the Alaska Native Claims Settlement Act extinguished all Indian Country in the state except for one reservation.

Workforce Investment Act

On March 15, the House adopted a bill, mostly along party lines, that would reauthorize the Workforce Investment Act (WIA). The legislation - the Supporting Knowledge and Investing in Lifelong Learning (SKILLS) Act (H.R. 803) - is similar to a measure approved by the House in the last Congress. It would consolidate 35 employment and training programs into one state block grant and reduce the role of local stakeholders in administering workforce development. It should be noted that Representatives Paul Cook (R-CA) and Gary Miller (R-CA) were two of only 14 Republicans who voted against the bill.

The Obama Administration, as well as House and Senate Democrats, are strongly opposed to the House bill. In fact, during committee consideration, Democrats on the House Education and the Workforce Committee walked out of the markup in protest, arguing that there was no willingness by the GOP to compromise on certain provisions.

For their part, the Senate Health, Education, Labor and Pensions Committee is working to draft its own bipartisan WIA reauthorization bill.

TANF Reauthorization

The stopgap spending measure approved this week includes a clean extension of the Temporary Assistance for Needy Families (TANF) program. The program, which was set to expire on March 27, will now be extended through September 30.

For its part, the House approved a stand-alone bill (HR 890) on March 13 that would reauthorize TANF through the end of the calendar year. That measure, however, contains a controversial provision that would prohibit the Department of Health and Human Services from waiving state welfare-to-work requirements.

Under current law, states must document that 50 percent of families receiving benefits are working or engaging in approved activities. However, the Obama administration issued a memorandum last July offering to waive the work requirements for states that want to undertake alternative work-placement programs. Republicans have contended that such a waiver would eliminate any requirement that TANF recipients pursue work or training. Democrats, on the other hand, counter that states would need to demonstrate that waiving certain federal requirements would result in moving more families into self-sufficiency.