EPA Administrator Browner also announced recently that over 3,000 sites were being removed from the Superfund Priorities List so many these sites would be freed and eligible for cleanup.
In the House, Rep. Charles Bliley, Chairman of the Commerce Committee, has introduced a Superfund reform bill that will target funds for brownfields. Chairman Bliley, a former Mayor of Richmond, Virginia, is seeking $15 million annually for grants to local governments to undertake environmental assessments of brownfield sites and $30 million annually for zero interest loans for cleanup. If this becomes part of the final Superfund reform law, it would be helpful to a number of cities to do something significant to clean up sites for redevelopment. The Administration plans to introduce an initiative to provide a special tax incentive for redeveloping brownfield sites.
Although the Small Business Administration faced some early opposition in the 104th Congress, its programs and funding remained essentially intact at year's end. Even so, Congress and the administration implemented some changes, particularly in the Small Business Investment Corporations (SBICs), 504 and 7(a) loan programs.
Last April, SBA preempted proposed legislative cuts by downsizing and reforming its own programs. It proposed a self-financing structure for the SBICs by which all costs and administrative expenses would be paid for by the 274 participating local agencies. Such a structure would eliminate the need for the program's annual subsidy of $50 million, but Congress has not agreed to a zero subsidy for the program. Congress has not passed a final appropriations bill for the agency, but it will likely keep the subsidy at $50 million, according to an agency source.
Changes in the 504 and 7(a) programs were also designed to reach a zero subsidy through incremental increases in the cost to borrowers. The reforms were proposed by the agency and approved in legislations (PL 104-46). To reach a zero subsidy for the 504 program, the new law increased the interest rate to borrowers by one-eighth of one percent. It excluded a provision passed by the Senate which would have limited debentures to $1.25 million or less.
For the 7(a) General Business Loan Guarantee, the bill reaches a zero subsidy by increasing the cost to small business borrowers and reducing guarantee levels. On loans exceeding $100,000, the bill reduces the maximum guarantee from 85% to 75%. On loans of less than $100,000, which includes the LowDoc loan program, the bill reduces the guarantee from 90% to 80%. It increases fees based on a scale of loan sizes as follows: 3% on the guaranteed amount between $0-$250,000; 4% on $250,000-$500,000; and 5% on $500,000-$750,000.
While major legislation that will consolidate job training and vocational education programs into block grants to the states is sure to be passed this year, the level of funding for the existing programs that will remain in effect until sometime in 1997 is the more immediate concern. The January 26 compromise that kept the government open until March 15 was unpleasant news for the programs of the Job Training Partnership Act (JTPA). Under the agreement, training programs for adults that begin July 1 will be cut by 17% percent from $997 million to $820 million. The dislocated worker program will be cut by 35% from $1.3 billion to $850 million. The year-round program for youth training will remain at $127 million. No money has been made available as yet for a youth summer jobs program as yet.
These program levels could be increased if there is a another budget agreement that provides more money for training and education or if the Senate approves the House-passed Labor/HHS appropriations bill with an increase in JTPA program levels. This, of course, would have to go to a conference committee.
Committees in both Houses of Congress worked on legislation during 1995 to reform the nation's workforce training programs. The Administration and the committees are generally agreed on the need for consolidating job training and vocational/technical education programs, block granting the funds to the states and providing vouchers, called "skill grants," to eligible individuals so they purchase the kind of training or retraining they need for employment. The Labor Department's categorical programs under the JTPA would be phased out along with a number of the Education Department vocational, technical and literacy programs.
The House reform bill, called the Comprehensive Employment, Education and Rehabilitation System (CAREERS) Act (HR 1617) would consolidate 100 federal programs into three block grants for adult training, youth training and literacy. Its chief sponsors are Reps. William Goodling (R-PA), Chairman of the House Committee on Economic and Educational Opportunities, and Rep. Howard McKeon, Chairman of the Committee's Subcommittee on Postsecondary Education, Training and Life-Long Learning. The Senate's Workforce Development Act (S 143) would meld 80 programs into one block grant with 25% to be used for education activities, 25% for employment activities and 50% for either education or employment depending on a state's priorities. The chief sponsor is Senator Nancy Kassebaum (R-KS), Chairman of the Senate Committee on Labor and Human Resources.
The Administration originally proposed to combine 70 programs into four block grants. While the Administration had proposed to increase funding by $1 billion for the programs in the consolidation, the House bill would cut funding by 20% and the Senate by 15%. The House bill would become fully operational by July 1, 1997. The Senate bill would allow a two-year transition period to July 1, 1998.
Both versions emphasize the following:
There is some concern in workforce training circles, such as private industry councils, that programs such as school-to-work transition will remain in the hands of educators and school systems with little authority with a limited role for businesses and local officials to require accountability.
Regional Workforce Entities
The House would require the creation of regional employment boards (REBs) while the Senate bill would encourage states to create them. These regional bodies would be modeled on existing programs in Massachusetts, Michigan and some other states. In 1988, Massachusetts broadened the authority of private industry councils (PICs) by giving them oversight on all job related education, training and employment services programs. Renamed REBs, these bodies are required to develop strategic plans based on the needs of workers, the community and businesses, and to establish benchmarks to measure progress and success. The REBs categorize the uses of workforce funding and evaluate the impact of the funds in the region.
The Massachusetts REBs identify a short list of critical and emerging industries, determine their workforce training needs and determine the capacity of education and training institutions to meet these needs. In keeping with the strategy to link workforce training with economic development, the REBs have been active in funding and working with industry cluster projects while brokering between training programs with individual companies. Based on information reports from the REBs, the MassJobs Council, headed by the lieutenant governor and a private sector leader, decides on the allocation of federal and state job training funds in the state. In Michigan, the PICs were renamed Workforce Development Boards (WDBs) with functions similar to those of the Massachusetts REBs.
Regional entities would set policy for the use of JTPA funds until such as time as they are replaced by block grants; vocational education funds, including tech-prep; school-to-work programs; adult education; and the Job Opportunities and Basic Skills (JOBS) to help welfare recipients transition to the workforce.
One-Stop Centers
The Administration, the House and Senate are all agreed on the need for One-Stop Centers in which customers can receive a comprehensive group of services to meet their needs for job training and/or retraining, counseling, referrals, placements, pre-interview preparation and other assistance. One-stop centers would be designed to eliminate duplication of services and visits to a multiplicity of agencies and to vastly improve on the present services offered by Employment Security offices. A major goal of one-stop centers is to deal more effectively with the needs of the displaced workers by helping them to transition into other employment and careers. The centers would serve both the unemployed and companies looking for qualified workers.
The federal program was begun on a pilot basis in 1993 by the Department of Labor to fund state-run One-Stop Career Centers and satellites. Thus far 15 states have received DOL grants to implement centers and another 23 states and territories have received planning and development grants to bring centers to the implementation stage.
Wisconsin has had a one-stop center program in place since 1985. State officials say that some of the centers have reduced annual overhead costs by $150,000 through the elimination of duplicate rent, staff and office equipment. The placement of displaced workers in new employment has improved from 39% under the previous system to 57%.
Funding for Existing Programs
In the meantime, the Labor Department's Job Training Partnership Act (JTPA) programs are being funded at the FY95 level as the House and Senate have not yet reached a conference agreement on FY96 funding. Funding for JTPA programs, which operate on a program year that runs from July 1 to July 30, are still uncertain without an approved FY96 budget.
A bill appropriating funds for the programs of the Department of Transportation (DOT) was passed by Congress and signed into law (HR 2002 became PL 104-50) by President Clinton on Nov. 15. The law allocated $37.5 billion for DOT, including $13.1 billion in direct appropriations from the Treasury and $24.4 billion to be obligated from the Highway Trust Fund and the Airport Trust Fund. The measure represented a considerable shift of resources from mass transit programs to highway construction grants.
For Transit Formula Grants, the major program which funds capital improvements and operating assistance for transit systems, slightly over $2 billion was appropriated, including $1.89 billion (94.5%) for urbanized areas and $110 million (5.5%) for nonurbanized areas.
The bill limits the amount of money available for operating assistance in urbanized areas to $400 million. Urbanized areas with populations under 200,000 are limited to an operating assistance level of 75% of the operating assistance they received for the 1995 fiscal year. This would amount to $92.9 million.
The appropriations act provides $666 million for new starts on fixed guideway modernization and extension projects being undertaken by transit systems across the country and $333 million for the replacement, rehabilitation and purchases of buses, for bus-related equipment and for bus-related facilities.
Among the major fixed guideway project commitments are: $130.4 million, Portland Westside LRT; $126.7 million, New York Queens Connection; $85 million, Los Angeles Metro Rail (MOS-3); $80.2 million, New Jersey Urban Core - Secaucus; $42.4 million, Atlanta-North Springs; $22.6 million, Houston Regional Bus Plan; $22.6 million, Pittsburgh Airport Phase 1; $16.9 million, Dallas South Oak Cliff LRT; $15.3 million, Maryland Central Corridor LRT; $14.4 million, Wisconsin central commuter; $12.5 million St. Louis Metro Link LRT; and $10 million, BART extension to San Francisco Airport.
All of the $333 million appropriated for buses and bus-related were earmarked to specified state and localities with projects. In the use of discretionary funds, the Federal Transit Administration gives priority to transit systems with significantly overaged fleets and to projects that assist in meeting the fixed route bus and paratransit requirements of the Americans with Disabilities Act (ADA).
The bill appropriated $85.5 million for transit planning and research. The Administration has requested $100 million which was approximately the same amount appropriated last year. Of the $85.5 million appropriated for FY96, $22 million would be used for national transit planning and research, $8.25 for the transit cooperative research program and $3 million for the National Transit Institute. The states would be allocated $39.5 million for metropolitan planning, $4.5 million for transit assistance planning in rural areas and $8.25 million for state planning and research.
University transportation centers were appropriated $6 million, the amount requested by the Administration.
Other Transportation Activity
Lead by Rep. Bud Schuster (R-PA), Chairman of the Committee on Transportation and Infrastructure, an effort was made in the House to remove the four transportation trust funds from the appropriations process which would remove the budget caps on them. The bill (HR 842) was approved by the Committee but stalled after that.
Congress provides transportation money annually in two ways. First, by making direct appropriations and second by allowing the affected agencies to obligate money from the trust funds. The four trust funds are for: highways, including mass transit; aviation; harbors; and inland waterways. The money in the funds comes from taxes on gasoline, airplane tickets and cargo, and all have significant amounts in them. The money in the funds is equal to about 11 percent of all non-defense spending controlled by Congressional appropriators.
Advocates for increased spending on transportation infrastructure have pushed to remove the trust funds from federal budget caps. Appropriators have been reluctant to move the trust funds off budget because by exempting them from cuts, larger cuts would have to made in other programs.
Congress has yet to take any action toward producing an authorization bill that would consolidate federal transportation programs into block grants and shift responsibility for them to the states.
The Clinton Administration had proposed in its FY96 budget proposal that 30 separate capital grant programs be consolidated into a Unified Transportaion Infrastructure Program (UTIP) which would account for two-thirds of the DOT budget. The 30 programs to be consolidated under the Clinton proposal included 10 federally-aided highway and grant programs, three discretionary grant programs, three transit formula grant programs, 13 airport improvement grant programs and a local rail freight grant program.
The UTIP was to consist of two parts: 1) state and local activities and 2) federal activities.
To fund state and local activities, DOT proposed the creation of a Unified Grant Program and State Infrastructure Banks. FY96 funding of $10 billion was proposed for the Unified Grant Program and $2 billion for the Infrastructure Banks. The State Infrastructure Banks are to be vehicles that would use federal seed money to leverage local and private sector funding under partnership arrangements.
DOT also planned to combine the existing highway and aviation trust funds into a new Transportation Trust Fund to be financed by highway and aviation taxes. Separate accounts would be established for surface transportation and aviation, however.
The Administration was to propose authorizing legislation to put the program consolidations in place and to reconcile them with the provisions of the 1992 Intermodal Surface Transportation Efficiency Act (ISTEA). The Administration proposals, made last February, have been undergoing further refinement. This authorization and consolidation legislation would be taken up the appropriate transportation committees in the House and Senate this year. The consolidation of the DOT programs was part of a deficit reduction plan proposed by the Administration late in 1994 which targeted DOT to take a $4.6 billion reduction over three years.
The 104th Congress has produced the first comprehensive reform of the nation's telecommunications law after several previous Congresses had failed to achieve agreement. The bill is expected to result in a more rapid expansion and penetration of the telecommunications "superhighway" and the integration of audio and video communications by ending monopolies and promoting competition in all the affected industries. This should have widespread economic development implications.
The far reaching legislation (PL 104-104) affects local and long distance telephone services; the role of telephone companies in manufacturing equipment, electronic publishing and alarm services; the role of all public utilities in telecommunications services; cable television; broadcasting; and the content of material on computer on-line services and television.
When implemented, the law will end the situation that has existed since 1984 when a federal court decision broke up the AT&T system into eight regional Bell operating companies while placing limitations on the activities of those companies.
The law preempts state and local laws that would bar competitors from offering telecommunications services. The Bell operating companies will have to allow their competitors to use their local networks. Any new company entering the local market will have to do the same as would any new company entering the local market.
For the first time since 1984, the Bell operating companies can enter the long distance market. The Bells and other long distance carriers can jointly market their services and set up separate subsidiary companies for this purpose. A Bell company's entry into the long distance market will have to be approved by the Federal Communications Commission (FCC) as being in the public interest.
The law will establish universal service requiring local companies to offer a minimum package of telecommunications services to customers regardless of the market for them in the area where these customers live. The FCC, working with state regulators, will set the initial federal standards for the services subject to changes that result from emerging technology. Companies will provide universal services at a just, reasonable and affordable price. Companies found to be essential for providing the service could receive subsidies.
Also for the first time since 1984, the Bells will be able to manufacture telephone equipment after they are approved for long distance service. They will also be able to offer electronic publishing through a subsidiary company. After five years, they can provide on-line monitoring. Ameritech, the Bell company for the Midwest, is exempted since it is already in the business.
For the cable television industry, the act deregulates rates for services beyond the basic tier of local and educational channels after three and a half years for major cable systems and immediately for small systems with less than 50,000 subscribers. A cable company would not have to wait to be deregulated, however, if a telephone company entered its market providing video programming to a comparable number of households being served by the cable company.
Telephone companies will be able to offer video services. The ban on telephone companies offering video services was struck down by a federal circuit court and the decision is under review by the US Supreme Court.
To restrict content, the bill bans the dissemination of "indecent" material on the Internet and on-line services. It also requires that television sets with screens of 13 inches or more be equipped with a special "v-chip" device that allows parents to screen out material they do not wish their children to see. The industry must develop ratings for sex and violence within one year that would be sent electronically to television sets. The FCC will write the ratings if the industries fail to do so.