Defense Authorization Act Provisions
In October, Congress passed the Defense Authorization Act. Two provisions specifically impact the base closure process, Section 2813 on interim use leases and sections 2835 and 2845 on economic development land conveyances. The interim use lease section approved DOD's proposal to amend the 1949 Federal Property Act so that it would conform to the BRAC interim use leasing authority. With regard to land conveyances, the measure authorizes the secretary of the Army to convey the water rights and related interests in the Rocky Mountain Arsenal to the city and county of Denver. It also authorizes the transfer of land at the Stewart Army Sub-Post to the town of New Windsor, N.Y., without consideration for economic development purposes. Additionally, sections 2843 and 2844 authorize the Army to transfer land at the Charleston (Ind.) Ammunition Plant and at the Volunteer Ammunition Plant in Chattanooga, Tenn., to the two communities for the purpose of developing the parcels as industrial parks.
Guidance for Site Closeout
In November, DOD opened the comment period on an integrated guidebook, The Environmental Site Closeout Process, that will provide guidance on the final stage of environmental restoration at military bases. The book and complementary Web site (www.afbca.hq.af.mil/closeout) serve as a single source of information on the process.
Site closeout is the last stage of environmental restoration, when DOD no longer actively manages or monitors the restoration site, and no additional environmental funds will be spent unless further remediation is necessary. With the program now more than a decade old, many installations are beginning to reach this stage.
The book explains the closeout process under CERCLA (Comprehensive Environmental Response, Compensation and Liabilities Act) and RCRA (Resource Conservation and Recovery Act) and also covers early transfer authority, community involvement, institutional controls and records management.
The main issue for the Department of Transportation (DOT) and one of the most significant to come before the 105th Congress was a long-term reauthorization of transportation programs and funding. After disagreements by members on both sides of the aisle, an agreement was hammered out that would succeed the expired Intermodal Surface Transportation Efficiency Act (ISTEA).
Transportation Equity Act
ISTEA, which provided the framework for federal surface transportation funding and policies, was set to expire at the end of FY97. When it became clear that reauthorizion legislation could not be agreed upon, a stopgap measure to extend ISTEA funding until April 30, 1998, was enacted.
Congress returned for the second half of the 105th with a new deadline for ISTEA reauthorization and two very strong bills, H.R. 2400 and S. 1173. The House version, sponsored by Transportation & Infrastructure Chair Bud Shuster (R-Pa.), called for $218 billion in spending over six years, with $181 billion allocated to highway, safety, and environmental programs and $36 billion for mass transit. The measure also sought to change the formula distribution of transportation funds so that states would get back a minimum of 95 percent of their contribution to the Federal Highway Trust Fund. The bill passed the House on April 1, 337-80.
The Senate version, dubbed ISTEA 2, would spend $214 billion over six years, including $173 billion for highway construction and safety programs and $41.3 billion for mass transit. The formula distribution would be changed to ensure each state received at least 91 percent of what it had put into the highway trust fund. The Senate passed the bill on March 12, 96-4.
Legislators worked to reach a compromise deal before the six-month ISTEA extension expired, but the deadline came and went. As an incentive to get a bill through, Congress did not create another extension, so for a few weeks, there were no new funds to allocate. One sticking point in negotiations was how to pay for both bills' proposed funding increases (over limits set in the balanced budget agreement). The House proposed using surpluses from the highway trust fund, while the Senate favored cutting discretionary spending. Also controversial was the $9 billion earmarked by the House for "special projects," criticized as a prime example of pork barrel funding.
TEA-21 Replaces ISTEA
In May, Congress crafted a compromise reauthorization bill called the Transportation Equity Act for the 21st Century (TEA-21). Under this bill, the federal government would provide approximately $217 billion in funding over six years. The Senate passed the bill first, 88-5, and the House passed the bill, 297-86, before sending it to the president. The bill was signed into law June 9.
The bill outlines $167.1 billion in new highway spending and $36.3 billion for mass transit. Money for special projects actually increased to $9.4 billion, with senators adding their own projects to push the total number of projects above 1,800.
Other programs that have specific earmarks in TEA-21 include:
The formula distribution has been changed to ensure a minimum return to each state of 90.5 cents for every dollar paid into the highway account of the highway trust fund. Additionally, each state will receive back a minimum of $1 million annually. Before TEA-21, some states were getting back far less than they had contributed, sometimes as low a return as 71 percent, while others were paying more than they were receiving back. The new law also expands project eligibility for the Congestion Mitigation and Air Quality (CMAQ) program to include public-private partnerships.
Funding DOT
Funding for DOT appeared to be on track to approval, largely due to the set spending figures in TEA-21, but ran into trouble in the summer. Eventually, the House bill served as the vehicle for the omnibus appropriations.
Funding for highways increased to $25.5 billion, representing a 20-percent increase over FY98 and more than the original request. Transit funding also received a boost to $5.4 billion, compared with the FY98 level of $4.8 billion. Funding for the welfare-to-work program was included in this figure with a $75 million earmark.
The budget for Amtrak, the national passenger railway, came in $12 million below the request at $609 million. This is substantially less than the FY98 allocation of $793 million. These funds are intended to assist Amtrak on the road to self-sufficiency.
The Federal Aviation Administration budget of $9.6 billion represents an increase of $500 million over last year's figure. The bill included an earmark of $2 billion for airport grants and a six-month reauthorization of the airport improvement grant program.
In the president's budget proposal, aviation was the only mode of transportation set to see an increase. In the end, all but Amtrak saw a funding jump.
Office of Worker & Community Transition
The Office of Worker & Community Transition (OWT) within the Department of Energy received a substantial decrease in funding, from $61.2 million in FY98 to $29.9 million in FY99. This is less than the $45 million administration request.
Activities under OWT seek to mitigate the negative effects on workers and communities caused by mission-related changes at the department. The department has downsized 22 of its nuclear weapons facilities and the impact on communities has been similar to that of military base closures.
OWT carries out its mission through two programs: 1) work force restructuring and 2) community transition. Workforce restructuring is focused on mechanisms to encourage worker retention and separation at the appropriate moment. Community transition focuses more on the area wide impacts and the diversification of the local economy. For FY99, $9.4 million was allocated to workforce restructuring and $16.6 million to community transition. The remaining budget is for program direction.
In October, the department sent to Congress the results of an independent assessment of the OWT program. The report found that the program had created or retained more than 22,000 jobs through workforce adjustment programs and community transition activities. The report noted that OWT had helped retain a skilled and productive workforce by offering early retirement and other voluntary separation programs. This also has reduced legal challenges and the incidence of workplace violence.
The report also highlighted the cases of the Mound and Pinellas facilities as examples of accelerated cleanup and landlord and maintenance cost savings due to cooperation with local communities in identifying industrial uses for excess facilities. OWT still will need to deal with issues related to early site closure, new contracting mechanisms and budget adjustments, the report concluded.
Community Development Financial Institutions
The Department of the Treasury's Community Development Financial Institutions (CDFI) Fund program invests and supports CDFIs in order to promote local economic development and access to capital. For FY99, Congress increased the fund's budget from $80 million in FY98 to $95 million. This is still $45 million less than the agency's request.
The CDFI has several components: the Core Component is the Fund's main program under which CDFIs may apply for financial and technical assistance; the Technical Assistance Component, which is designed to address the capacity needs of CDFIs, which have significant potential for increasing their community development impact; and the Bank Enterprise Award (BEA) program, which provides incentive to regulated banks and thrifts to invest in CDFIs and to increase their services, lending and investments in distressed communities.
In 1998, the Fund awarded $75 million to 190 banks, thrifts and CDFIs through BEA program and CDFI's core component and technical assistance component programs. The program award breakdown follows: $27.5 million for the 79 BEA winners, $44 million for the 42 CDFI core component winners and $3 million for the 70 winners of technical assistance funds.
Raising Industrial Development Bond Caps
An effort to raise the level of authority that states have to issue tax-exempt industrial development bonds (IDBs) appeared in both chambers in 1998. The bills, H.R. 979 and S. 1251, sought to restore the bond cap to its pre-1988 level of $75 per capita or $250 million, whichever is greater. The current limit stands at the greater amount of either $50 per capita or $150 million. The cap covers issuances of tax-exempt bonds for projects such as affordable housing, redevelopment of blighted areas and hazardous waste disposal.
The increase was eventually added to the enacted 1999 Omnibus Appropriations Bill. The result is a delayed increase in the cap. Beginning in FY 2003 the cap will rise to $55 per person or $165 million, whichever is greater, per state. Each year thereafter the cap would increase until FY 2007 when the limit would be $75 per person or $225 million per state. Some supporters of the increase have expressed dissatisfaction with the drawn out increases and have indicated an intention to file a new proposal this year. As it stands now there will be no increase in the IDB private activity level until FY 2003.
The House version of the bill was introduced by Reps. Amo Houghton (R-N.Y.) and Barbara Kennelly (D-Conn.) and attracted 316 sponsors. The Senate bill was introduced by Alfonse D'Amato (R-N.Y.) and John Breaux (D-La.) and had 54 sponsors.
Financial Modernization
Riding a political roller coaster early and then later in the year, the effort to overhaul the financial services industry came close to reaching congressional approval in October. The House showed early interest in an overhaul measure at the beginning of the session when House Banking Chair Jim Leach (R- Iowa) introduced H.R. 10, a financial modernization bill, in January 1997.
The measure sought to repeal the so-called Glass-Steagall Act, or the 1933 Banking Act, that had set up a firewall between the banking and securities industries in the wake of the stock market crash. H.R. 10 would permit affiliations between the banking, insurance and securities industries, allowing for the creation of financial holding companies. Banks could use these companies to underwrite and sell insurance and securities, and insurance companies and brokerage firms could acquire banks. There was some concern as to what impact the newly allowed mergers would have on the effectiveness of Community Reinvestment Act (CRA) requirements.
The bill was referred to the House Banking and Commerce committees, which both held hearings and each approved their own version of H.R. 10 by the end of 1997. Approval did not come without fierce opposition from various consumer and community-based groups, whose opposition threatened to kill the bill in committee.
The slings and arrows continued to hound the measure early in the year. After a compromise was reached on the House version of the bill, prospects for a floor vote looked promising in March. But attachment of a credit union measure drew sharp criticism and, mixed with strong opposition from the banking industry, the White House and consumer groups, eventually led to the withdrawal of the bill from floor consideration. The bill, now called the 1998 Financial Services Act, looked dead but supporters were still hopeful for another House vote in May. Meanwhile, in the Senate, Banking Committee Chair Alfonse D'Amato (R-N.Y.) announced that the House would need to produce a bill with broad bipartisan support in order for his committee to consider the measure.
A new version of H.R. 10, put together by Commerce Committee Chair Thomas Bliley Jr., (R-Va.) and Ranking Minority Member John Dingell (D-Mich.), made it to the floor in May. The bill passed on May 13, 214-213, despite opposition from some in Congress that the bill would not protect consumers enough and would force small and medium-sized banks to eventually merge with larger banks. The president also threatened to veto the bill. One of the main point of contention between the White House and congressional supporters of the bill was the regulatory structure. The bill preferred that bank operating subsidiaries be regulated by the Federal Reserve, while the White House preferred that this be done by the Treasury Department.
The Senate briefly took up consideration of the bill in October, but debate quickly fell apart over the issue of CRA requirements. The Senate Banking Committee favored eliminating CRA requirements for securities and insurance companies, while Sens. Phil Gramm (R-Texas) and Richard Shelby (R-Ala.) had planned floor amendments that sought to eliminate CRA requirements on banks. The measure was removed from consideration.
In the final days of the 105th Congress, when it was clear that the bill would not pass in the 105th Congress, Banking Chair Leach reintroduced a financial services modernization bill to ensure the initiative received early consideration in the 106th Congress. The bill included several Senate provisions and Leach hopes the issue will be brought back to the legislative forefront in early spring.
Weed & Seed
The Weed & Seed program budget included in the Department of Justice appropriations remained level at $33.5 million. These funds can be used to support intergovernmental agreements with state and local law enforcement agencies that investigate and prosecute cases of violent crime or drug offenses.
This program is designed to help rid designated sites of violent crime, gang activity, drug use and drug trafficking ("weed") and spur social and economic rebirth ("seed"). In FY98, more than 170 sites were funded and the program had more than 60 applicants for FY99 funding.
There are four components of the Weed & Seed Strategy:
The Executive Office for Weed & Seed coordinated with other cooperating programs or agencies such as AmeriCorps, Empowerment Zones and Enterprise Communities, and the Interagency Working Group on Weed & Seed. In addition, it processes Weed & Seed property forfeitures to convert problem properties to community uses; coordinates asset forfeiture fund reimbursement of state and local law enforcement; and awards official recognition to unfunded sites.
A study released late in the year, the National Impact Evaluation, examined eight Weed & Seed sites and found that at six sites, certain types of crime had declined more rapidly than in comparable areas, improvements partially attributable to program efforts. The study also found that Weed and Seed funding had a significant impact on general community revitalization efforts.
Employment Training Administration
The Department of Labor's Employment and Training Administration (ETA) received an increase over the previous year's discretionary funding to $9.2 billion, still $123 million less than the president's request. ETA funds the majority of the administration's employment and training programs.
The administration's request for disadvantaged youth programs received full funding of $2.6 billion. These fund will support the following programs:
The Adult Training formula grant program funding remained level with FY98 at $955 million, still $45 million short of the administration's request. This program offers employment and training assistance to economically disadvantaged adults, many of whom receive federal aid. This funding level is expected to support 383,000 participants.
The Dislocated Worker program funding increased $6 million from $1.4 billion, still $45 million less than the president's request. The program targets adults who have been laid off and provides them with retraining and adjustment services. The program is expected to provide services to 666,000 participants. The spending bill also provides demonstration funding for projects that provide assistance to new entrants into the workforce and to incumbent workers.
The Employment Service and One-Stop Career Centers initiatives also received a decrease in funding, from a total of $989.9 million in FY98 to $968.1 million in FY99. For the One-Stop Career Centers program, funding dropped from $163 million to $146 million, a decrease that is consistent with the planned federal phase-out in funding that will shift responsibility to states.
The budget included a number of earmarks for pilots and demonstration programs. A new competitive grant program to serve high-risk adults and youth will be funded with $9 million under this category. Also, a competition for the creation of regional consortia to assess employer skills needs received $9 million.
Other ETA programs that received funding included: the Unemployment Insurance program with $2.4 billion, the Community Service Employment for Older Americans with $440 million, the Migrant and Seasonal Farm Workers program with $78.5 million, and the Native American program with $58 million.
The department's welfare-to-work grant program already received mandatory appropriations of $1.5 billion for both FY98 and FY99. The FY99 spending bill includes a provision to rescind formula grant funds not obligated by states in FY98 and FY99. This amount is estimated to be roughly $137 million.
Workforce Program Consolidation
After over a decade of debate and differing proposals, Congress finally passed legislation to would overhaul the federal job training and placement system. The president signed into law the Workforce Investment Act (WIA) on Aug. 7 after Congress cleared it in July. The bill is designed to modernize and reduce the number of redundant programs under the old Job Training Partnership Act (JTPA) by consolidating more than 60 programs into three block grants administered by states. The bill passed amid growing concern over labor shortages across the country.
The cornerstone of the new act is the one-stop service delivery system. One-stop centers are designed to be more user-friendly in delivering job training services, with services and resources available under one roof. WIA requires that the following services be available at all one-stop centers:
Some states already have established one-stop centers and almost 1,000 already exist nationwide.
As part of the structural changes that the act requires, workforce investment boards (WIBs) will replace the private industry council (PIC) structure established under JTPA. WIB members will be appointed by local elected officials and will be responsible for planning and overseeing workforce development programs. These local boards will be made up of business representatives, education providers, labor and community-based organizations, economic development agencies and representatives of one-stop service agents. The bill provides WIBs with more flexibility and information so that they can continue effective programs and overhaul unsuccessful initiatives.
State WIBs, replacing State Job Training Coordinating Councils, are responsible for drafting a five-year unified plan to ensure a coordinated and nonredundant implementation of programs under WIA, and the Wagner-Peyser and Food Stamp acts. Although state WIBs can decertify local boards for fiscal noncompliance or programmatic nonperformance, their role will be largely regulatory to allow for flexibility at the local level.
Performance also will be highlighted under the new act. State and local areas will be evaluated by standard performance measures, and those that perform well will receive incentive grants for in-state workforce projects. Those that do not meet the performance requirements will be penalized with a reduction of funding of up to 5 percent.
Small Business Administration
The FY99 budget for the Small Business Administration (SBA) supports $10 billion for the agency's flagship 7(a) loan guarantee program. Last year, the program received $9.2 billion. This is still less than the $11 billion requested by the president.
This program targets assistance to those businesses unable to secure financing through traditional lending channels. Loans guaranteed through this program can be used to purchase real estate for business operations, construction, renovation or leasehold improvements, acquisition of furniture, fixtures, machinery and equipment, purchased of inventory and working capital. SBA can generally guarantee up to $750,000 of the loan.
The Section 504 Certified Development Company program authorization continued to climb, hitting $3.5 billion for FY99. The request was for level funding of $3 billion. The program provides long-term, fixed-rate financing that can be used to purchase land and make improvements, construct or modernize, renovate or convert existing facilities, or purchase machinery and equipment. The program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.
The Small Business Investment Companies (SBIC) program also received a boost to $1.44 billion up from the $1.3 billion in lending authority provided for FY98. This is broken down into $640 million for new debenture financing and $800 million for participating securities financing. This program provides debt and equity financing to small businesses for risk capital growth, modernization and expansion activities. SBICs are privately owned and managed, for-profit investment firms.
The Small Business Development Center (SBDC) program saw a budget increase from $75.8 million to $82 million. SBDCs provide business with management, technical and financial assistance.
One-Stop Capital Shops received level funding of $3.1 million. The centers funded by this program offer assistance to businesses and foster entrepreneurism in economically distressed areas.
An effort to substantially increase the 7(j) program to a budget level of $9.5 million was unsuccessful, as program funding remained level at $2.6 million. The 7(j) program offers specialized training, professional consultant assistance and executive development to disadvantaged small businesses.
The Women's Business Center program budget doubled to $8 million for FY99. One of the budgetary goals for this program is to establish in every state a center that can assist women entrepreneurs. The Microloan Program saw its funding decrease to $72 million. Funding for technical assistance grants to profit microlenders increased to $19.4 million, up from the agency's level funding request of $16.5 million. Loans in this program range from $100 to $25,000, with an average size of $10,000.
Funding for the Disaster Loan program increased from $901 million to $1.15 billion. This program provides direct loan to homeowners, small businesses and other business that have suffered financial or property losses as the result of a disaster.
The Service Corps of Retired Executives (SCORE) program received level funding of $3.5 million. This provides assistance to entrepreneurs through the use of volunteer business experts. Also receiving level funding was the U.S. Export Assistance Centers, with $3.1 million.
And finally, the newly created HUBZones (Historically Underutilized Business Zone) procurement program received only half of the president's request of $4 million. The purpose of this program is to provide federal contracting opportunities for certain qualified businesses located in distressed communities.
System Modernization Planned
In June, SBA issued a report outlining a three-year systems modernization project that includes efforts to develop a new loan monitoring system. This new system will help SBA manage its basic loan guarantee programs by improving data collection and analysis, and improving oversight and evaluating activities for all SBA programs.
Several factors have contributed to the development of a new system, such as increased privatization of SBA services, changes within the finance industry, technology improvements, the need for gap financing and the globalization of the marketplace.
As an example of how far the agency's privatization efforts have come, the report said that 75 percent of the SBA's loan credit decisions are substantially made by private-sector partners. SBA has transferred some of its loan underwriting, servicing and liquidation activities to the private sector, creating the need for a loan monitoring system.
The report also highlighted the extent to which SBA program volume has grown. In 1997, SBA provided almost $46 billion in credit and capital to small businesses in the form of loans and loan guarantees. In 1992, the total was slightly more than half of that at $23.7 billion.
New Certification for Disadvantaged Businesses
In September, SBA announced a new certification program for small disadvantaged businesses (SDBs) to assist their involvement in the federal procurement contracting process. Certified SDBs will be eligible for preferences when bidding for federal procurement contracts in certain industries. The main preference is a price evaluation adjustment of up to 10 percent for SDBs bidding as prime contractors, with preferences also available for large companies that use SDBs as subcontractors.
In the past, companies were allowed to "self-certify" or to "truthfully identify" itself as disadvantaged. The new process directs the SBA to review applicants and categorize a small business as disadvantaged only if the business is owned and controlled by someone who is socially and economically disadvantaged. Companies certified under SBA's 8(a) program are already considered SDBs.
The program is designed in part to comply with the U.S. Supreme Court decision in Adarand Constructors v. Pena. The case directs affirmative action programs to focus only on remedying the lingering effects of discrimination.
Environmental Protection Agency
The Environmental Protection Agency (EPA) received $1.5 billion for Superfund, which supports activities related to the 1980 Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). This represents level funding but is less than the $2.1 billion sought in the budget proposal. Additional funding of $650 million would be available Oct. 1, 1999, if reauthorization legislation were enacted by August 1, 1999.
Superfund assists with the cleanup of less contaminated sites, such as brownfields. As outlined in EPA's budget proposal released in February, the goal for FY99 is to complete the cleanup of 136 brownfield sites. Brownfields are defined by the EPA as abandoned, idled or underused industrial and commercial land where expansion or redevelopment is complicated by real or perceived environmental contamination. Within the Superfund budget is $91 million earmarked specifically for brownfields redevelopment, an increase of almost $5 million from FY98.
EPA will continue its Assessment Demonstration Pilots. To date, the agency has funded 226 brownfield assessment pilots. EPA expects to fund an additional 100 of these $200,000 grants by the end of May 1999. The first set of applications was due in December. Another group of pilots will be named based on applications submitted by late March.
Unlike the assessment pilots, revolving loan fund pilots can use funds for cleanup activities. In 1997 EPA awarded 24 revolving loan fund pilots, at $350,000 apiece, but the funds were put on hold in 1998 due to congressional action. For FY99, EPA expects to select 63 new RLF pilots with awards of $500,000 apiece. To be eligible, a community must have been awarded an assessment pilot prior to 1999. The application deadline is March 8.
Showcase Communities Winners Announced
On March 17, Vice President Gore announced the winners of the EPA-sponsored Showcase Communities program. A total of $28 million was awarded to the following 16 communities: Baltimore; Chicago; Dallas; East Palo Alto, Calif.; Glen Cove, N.Y.; Kansas City (Kansas and Missouri); Los Angeles; Lowell, Mass.; Portland, Ore.; Providence, R.I.; St. Paul, Minn.; Salt Lake City; Seattle; Stamford, Conn.; Southeast Florida; and Trenton, N.J.
These cities will serve as national models of environmental remediation and economic revitalization efforts. An additional benefit of this program is the assignment of a federal employee to each community. The federal employee will help oversee and coordinate the program.
There are three basic goals for the program. The first is to promote environmental protection, economic redevelopment and community revitalization. Second is the creation of public, private, nonprofit and community partnerships. Last is the development of national models that can be replicated across the country. The administration hopes to create up to 196,000 jobs and preserve suburban "greenfields" through the redevelopment of brownfields.
This program is part of a two-year, $300 million federal program called the National Partnership Action Agenda. More than 15 federal partners are collaborating in this brownfields investment initiative.
Superfund Reform
Work continued in the House and Senate at the Committee level to move forward bills that would reauthorize and reform the Superfund program. Two bills emerged as the strongest contenders, H.R. 2727 and S.8.
The House version was sponsored by Rep. Sherwood Boehlert (R-N.Y.), chair of the Subcommittee on Water Resources & the Environment. The bill attracted 45 cosponsors and was considered in subcommittee in March. The bill sought to make changes to the liability and remedy selection requirements in Superfund and other reforms that would spur redevelopment of brownfields. Specifically, the bill would revise the "innocent parties" provision of the 1980 Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) by eliminating the threat of liability to so-called innocent landowners who did not cause or contribute to the release of hazardous substances at a facility.
The bill also would carve out a specific, stronger state role in Superfund responsibilities by transferring responsibilities to qualified states. Further, the bill would authorize qualified states to run their own cleanup programs without being subject to federal enforcement.
There also was a brownfields title in the bill that sought to encourage brownfields redevelopment and eliminate barriers caused by the fear of Superfund liability. The bill would create two different brownfields programs, the brownfields assessment grant program, with $20 million annually, and the brownfields remediation grant program with $65 million annually. An additional $25 million would be available for state voluntary cleanup programs.
When the bill was considered in subcommittee, Transportation & Infrastructure Chair Bud Shuster (R- Pa.) had warned that the bill would not be considered at the full committee level unless it had overwhelming support. The 18-12 vote of approval ensured that the bill moved no further and the measure was effectively killed for the rest of the session.
The Senate measure, sponsored by Environment and Public Works Chair John Chafee (R-R.I.) was considered in committee and came up for a vote in March as well. The bill also sought to amend and reauthorize Superfund, authorizing $7.5 billion over five years for the program.
The bill also would exempt co-disposal landfill generators, arrangers and transporters, reinstate Superfund corporate and excise taxes, place caps on the number of sites that can be added to the National Priorities List, and eliminate non-use damages and lost-use damages for pre-1980 activities. Additionally, it would create a small business exemption for those businesses with 30 employees or fewer, or with less than $3 million in annual gross revenues.
Although much time was spent in committee to iron out differences, when the bill came to a vote in committee, a highly partisan decision was the result. Although the bill was approved, it saw no further action.
Reauthorization and reform of the Superfund program will surface in the 106th Congress. One chief stumbling block that must be overcome in order for any bill to gain bipartisan support is a resolution of the roles of the state and the federal governments in Superfund implementation.
Appalachian Regional Commission
The Appalachian Regional Commission (ARC), reauthorized in the same bill as the EDA, received $66.4 million for FY99 to fund its economic development programs. This is slightly less than the president's proposal for $67 million. ARC funding supports business and entrepreneurial development, water and sewer systems, education, workforce development, health services, and other economic development initiatives in states served by ARC.
Established in 1965, ARC fosters development in about 400 counties in all of West Virginia and contiguous parts of Alabama, Georgia, Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee and Virginia.
The agency also will receive $200 million in highway funding for the fiscal year. Under the Transportation Equity Act for the 21st Century (TEA-21) the agency will receive an additional $2.25 billion over the next five years to fund the Appalachian Development Highway System.
Federal Emergency Management Agency
The Federal Emergency Management Agency (FEMA) received $307.8 million to carry out disaster relief and related activities for FY99. The Disaster Assistance Direct Loan program was authorized at $1.4 million.
For Emergency Management and Planning Assistance, $240.8 million was allocated. Of these funds, $25 million was earmarked for pre-disaster mitigation grant activities. Congress also directed the U.S. Fire Administration to conduct a 12-month pilot project to promote the installation and maintenance of smoke detectors in high-risk residential areas.
Limiting Incentives
A new bill that would curb the use of economic incentives in business attraction efforts was introduced by Rep. David Minge (D-Minn.). The Distorting Subsidies Limitation Act, or H.R. 3044, would create a 15-25 percent federal excise tax on firms benefiting from special targeted economic subsidies. The goal of the bill is not to collect taxes, but rather to stop corporations from extracting special deals from municipalities by instituting a "sin tax."
The bill defines a "distorted subsidy" as: any grant; any contribution of property or services; any loan made available to a business at rates below those commercially available to taxpayers; any tax deferrals or payment of any loan or lease; or any reduction for fees or other charges for the use of governmental facilities such as roads, sewage treatment facilities and solid waste disposal facilities.
While the bill would restrict the use of federal, state and local subsidies, the focus would be on "targeted" subsidies only. For example, federal funds could still be used for economic development activities as long as the money was available to all businesses or was used for an established federal initiative such as the EZ program.
The bill also addresses tax-exempt bond financing. Interest on bonds that supported a specific business entity would be denied exemption from tax. For example, the construction of a stadium that benefited a specific business such as a sports franchise would not be tax exempt. The bill was referred to the House Ways & Means Committee, where it did not see any action. It will likely be reintroduced in the next session.
High-Technology Worker Visas
Both the House and Senate introduced bills to increase the number of visas issued annually to high- technology workers. The measure sought to raise the cap on the number of high-tech visas from the current level of 65,000 to 115,000 for the next two years. The limit would drop to 107,500 in the year 2001 and then return to 65,000 per year after that.
Companies would have to pay $500 per visa application and the money raised from this, estimated at $75 million annually, would fund college scholarships and job training for low-income students in the math, engineering or computer sciences fields. Companies that use the visas may not do so at the expense of American workers, and a provision has been built into the legislation that would punish employers who violate this rule.
Both the House and Senate voted to increase the number of these visas and the measure was included in the omnibus appropriations bill signed by the president in October.