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California Capitol Hill Bulletin



Volume 6, Bulletin 32 -- October 7, 1999

CONTENTS OF THIS ISSUE:
House Takes Up Reauthorization of Title I Education Funding; Woolsey Wins Agreement To Examine Cost-of-Living Adjustment
Judiciary Subcommittee Marks Up Internet Bills
Cybersquatting Bill
Electronic Signatures
Senate Environment Committee Examines MTBE Issue
Governor Davis Weighs In On VA/HUD Appropriations
House Committee on Commerce Takes Up Energy Competition and PUHCA Repeal
Report on California's Economy: Smart Public Investments
House Names U.S. Salinity Lab For Rep. George Brown
CCSCE Releases Outlook of California's Economy
California Businesses Produce More Employee & Payroll Growth than National Average, According to Census Report
State's Uninsured Rate Exceeds, Climbs Faster Than U.S. Rate


To expand communications between Washington and California, the California Institute provides periodic faxed bulletins regarding current activity on Capitol Hill which directly impacts our state. Bulletins are published weekly during sessions of Congress, and occasionally during other periods. The e-mail edition is made possible in part by in kind donations from Sun Microsystems and QUALCOMM, Inc.

House Takes Up Reauthorization of Title I Education Funding; Woolsey Wins Agreement To Examine Cost-of-Living Adjustment

The House Committee on Education and the Workforce this week began to markup H.R. 2, the reauthorization of the Elementary and Secondary Education Act, the Bilingual Education Act, and other programs targeted at disadvantaged elementary and secondary school students. H.R. 2 would reauthorize the $8.35 billion Title I formula grant program for disadvantaged students. The Committee worked for three days, and will continue the markup next Wednesday.

Federal Title I funds are allocated local school districts based in part based on the number of students at or below the national poverty line. (California houses nearly 15% of the nation's poor children, yet it receives less than 12% of Title I funds.) This week's discussion revolved around how the states may use the $8.35 billion in Title I funds, once fully administered by Washington. Next week, the markup will also focus on the authorization of $400 million for migrant children and $50 million for delinquent and neglected children.

Chairman William F. Goodling (PA) opened the markup by stressing the importance of the four key factors he believes should be an integral part of the Title I grant program: quality of instruction; accountability at the state level; school choice; and local flexibility.

Rep. Donald M. Payne (N.J.) offered an amendment to retain the current percentage of disadvantaged students (50%) that schools must have in order to use Title I programs for improvement of all student achievement. The Committee bill had initially proposed reducing that threshold to 40%. Below the threshold, schools have to target their federal funds at individual students, requiring them to pull certain children from regular classrooms or set up additional ones. Payne's amendment, which restored the 50% threshold, was approved by a vote of 24-21.

Several amendments were offered to broaden school and parental choice. Rep. Tom Petri (Wis.) offered an amendment to allow a student to retain Title I aid when transferring public schools, regardless of whether or not that school was "failing," as required under the program. The amendment was rejected 13-28.

Today, Reps. Lynn Woolsey (Petaluma) and John Tierney (MA) offered an amendment to develop a formula factor to compensate school districts located in states forced to spend more to educate children because of high costs of living. Due to variances in costs of living among states, Woolsey argued that some disadvantaged students are denied adequate Title I funding relative to children in low-cost areas. Consequently, she proposed to add a state-level Cost Of Living Adjustment (COLA) factor for allocating Title I dollars. While no state-level COLA index presently exists, Rep. Woolsey argued that the federal government should develop such a measure. After discussion of the amendment, Woolsey agreed to withdraw the amendment after Chairman Goodling agreed to support a study of the issue.

Developing a cost-of-living index could increase California's funding, thereby ameliorating a portion of the state's longstanding Title I shortfall. Such a factor could be used to allocate new funds or existing ones, and nearly half of states would benefit.

Other provisions in the bill would hold all Title I students to the same educational standards as other students, require schools and districts receiving Title I funding to demonstrate improvement through annual report cards, mandate that students obtain parental permission before being placed in English language instruction programs using Title I funds, and require students who have attended school in the United States for three or more years to be tested in reading and language arts in English.
 

Judiciary Subcommittee Marks Up Internet Bills

The Judiciary Committee's Courts and Intellectual Property Subcommittee reported out two bills dealing with different aspects of the Internet on Thursday, October 7.

Cybersquatting Bill

H.R. 3028, the Trademark Cyberprivacy Prevention Act, was reported by voice vote. The bill, authored by Reps. Jim Rogan (Glendale) and Rick Boucher (VA), is aimed at stopping "cybersquatting." Cybersquatting is the practice of registering, in bad faith, an Internet domain name or a website using the same or confusingly similar trademark of another entity. The cybersquatter then may offer its registered name for sale to the rightful trademark holder at an exorbitant price, or use the name or site in such a way as to exploit or dilute the rightful trademark. Often, rightful trademark holders are unable to identify the cybersquatter, because of misinformation used when registering the mark, and therefore, current trademark enforcement law and procedures are not feasible.

H.R. 3028 grants trademark holders more accessible remedies against Internet infringers without substantively changing current trademark law. It prohibits the registration, use, or trafficking in a domain name that is identical or confusingly similar to, or dilutive of, a distinctive trademark. It establishes: (1) a civil cause of action against an infringer who acts with the bad faith intent to profit from the rightful trademark; and (2) an in rem civil action through which the infringing mark can be forfeited or canceled.

The bill was unanimously supported by the Subcommittee and approved without amendment.

Electronic Signatures

The Subcommittee also reported by voice vote H.R. 1714, establishing the validity of electronic signatures, after endorsing an amendment in the nature of a substitute offered by Chairman Howard Coble (NC). The bill establishes that signatures executed electronically have the same binding, legal effect as handwritten signatures on paper documents. The Coble substitute was adopted by voice vote as a substitute for H.R. 1714 as it was reported by the House Commerce Committee. The substitute is designed to ensure that state laws are preempted by the federal legislation only until a state adopts either the Uniform Electronic Transactions Act (UETA) or a similar electronic signatures statute.

During consideration of the substitute, Reps. Howard Berman (Valley Village), John Conyers (MI), and Zoe Lofgren (San Jose) offered an amendment to further limit the scope of the bill's preemption provisions, and ensure that federal and state entities have the flexibility to determine that handwritten signatures continue to be necessary for certain official records and documents. After discussion of the issue, Chairman Coble agreed to work with the amendment's authors before the full Committee's markup to draft language to achieve the same result. Reps. Berman, Conyers, and Lofgren then withdrew the amendment.

The Judiciary Committee is expected to mark up the legislation next week.
 

Senate Environment Committee Examines MTBE Issue

The Senate Committee on Environment and Public Works' Subcommittee on Clean Air, Wetlands, Private Property, and Nuclear Safety held a hearing on Tuesday, October 5 on the findings of the Environmental Protection Agency's Blue Ribbon Panel (BRP) on the oxygenating fuel additive MTBE. The MTBE gasoline additive is used to produce reformulated gas (RFG) that has contaminated drinking water supplies in California, as well as other states. See, Bulletin, Vol. 6, No. 31 (9/30/99).

During her opening statement, Sen. Barbara Boxer cited the devastating effects that MTBE has had on water supplies in California. Passing around a bottle of MTBE contaminated water from Santa Monica, Sen. Boxer made the point that the city has had to shut down 71 percent of its water supply because of MTBE, and must now buy Colorado River water.

Dan Greenbaum, President of Health Effects Institute and Chair of the BRP, testified on the panel's findings. Although reformulated gasoline with MTBE has produced substantial reductions in pollution emissions, the panel found that it has seeped into drinking water supplies. As a result the panel agreed that use of MTBE should be reduced "substantially," with some members of the panel supporting its complete phase out. The panel also recommended that Congress eliminate the current Clean Air Act provision requiring that two percent of RFG by weight consist of oxygen, "to ensure that adequate fuel supplies can be blended in a cost-effective manner while reducing usage of MTBE."

Michael P. Kenny, Executive Officer of the California Air Resources Board, also testified. He stated that California's RFG program has been an unqualified success, and does not mandate the use of oxygenates, such as MTBE, to meet the state's strict emissions control standards. Because of the possible market disruptions that could occur if MTBE is banned without also lifting the 2 percent oxygenate requirement, Mr. Kenny stated that the Governor, the California Environmental Protection Agency and the Air Resources Board support lifting the oxygenate requirement.

Testimony of all the witnesses can be obtained through the Committee's website at: http://www.senate.gov/~epw.

Correction: Last week's article on MTBE and H.R. 11 inadvertently used the word "bill" instead of "amendment" when discussing the amendment offered by Rep. Green. Reps. Brian Bilbray and Anna Eshoo opposed the amendment, not the bill.
 

Governor Davis Weighs In On VA/HUD Appropriations

Governor Gray Davis wrote letters on October 6 to the Chairs and Ranking Members of the House and Senate VA/HUD Appropriations Committees. The VA/HUD bill is currently in conference. The letters urge the conferees to support the House version of the report language on FEMA's Public Assistance Insurance Requirement. The House version calls on FEMA not to publish a rule until a study of the impact on state and public entities is completed. See, Bulletin, Vol. 6, No. 29 (9/16/99).

The letter also supports full funding for HUD's community development grant programs, but opposes HUD's proposal to create "Optional Entitlement Communities."
 

House Committee on Commerce Takes Up Energy Competition and PUHCA Repeal

The House Committee on Commerce held two days of hearings on October 5 & 6 on electricity competition. Both hearings examined H.R. 2944, which is designed to deregulate electricity markets without disrupting a reliable source of electricity for consumers. A third day of hearings on October 7 discussed the repeal of the Public Utility Holding Company Act of 1935 (PUHCA).

Witnesses in attendance at the electricity deregulation hearing included Vicky A. Bailey, Commissioner of the Federal Energy Regulation Commission and T.J. Glauthier, Deputy Secretary for the U.S. Department of Energy. With some concerns, Bailey supported the measure and commented that "taken as a whole, H.R. 2944 does a very good job of threading the needle - allowing utilities to develop their own competitive business strategies, while ensuring that competitive miscalculations do not impair the reliable operation of the grid or limit the availability of low-cost energy service." Glauthier, on the other hand, stated that while the Clinton Administration supports a comprehensive restructuring of electricity, a lack of federal action has already led to confusion, uncertainty, and unreliability in states already deregulated. Glauthier testified that the Administration does not support H.R.2944.

At the PUHCA hearing, Isaac C. Hunt, Commissioner of the U.S. Securities and Exchange Commission (SEC) testified as one of six witnesses before the committee. Hunt explained that the SEC supports repeal as a way to reduce unnecessary burdens on America's energy industry while providing adequate protections for energy consumers.

Due to time constraints in this legislative session, no final action is expected to take place on this issue before the end of the year.
 

Report on California's Economy: Smart Public Investments

The Palo Alto-based Center for Continuing Study of the California Economy (CCSCE) emphasizes the need for a carefully planned strategy for infrastructure planning in its report, Smart Public Investments for the California Economy: Information and Analysis for Infrastructure Planning. The report stresses that California's long term economic growth is highly dependent on investment in both its physical and environmental infrastructure. Since both entrepreneurs and workers in high-wage industries desire a high quality of life, California would be unable to continue to attract these industries without good schools, clean air, and effective transportation. The report outlines current efforts in infrastructure planning, and the challenges California faces, as well as characteristics and examples of the most effective investments.

The report cites California's unchanged funding in capital outlays coupled with its continual growth since the 1960s as major contributors to its infrastructure challenge. California has seen both job and population growth, yet public capital investment has not nearly kept pace with this growth. Thus, California remains below average in public investment when compared to other states. Furthermore, by 2020, according to the report, California can expect the addition of five million jobs, twelve million residents and four million households. Californians are contemplating nearly $200 million in public investments over the next 10 years to begin to fix the problems.

According to CCSCE, forming a blueprint to meet California's infrastructure challenges begins with the gathering of complete, organized, and needs-based information before investment. Starting with a discussion of local, regional and state needs, the report suggests that the collection of information include all components of infrastructure investment. While current sources of information concentrate most of their efforts on how to raise the unfunded portion of investment needs, CCSCE stresses the need to decide the best way to meet California's needs. The report cites Capital Outlay's 1999 assessment on K-12 construction as an example in which funding needs are addressed without any specification of the number of classrooms needed, desired level of total funding, or allocation of that funding.

According to CCSCE, no effective investment in infrastructure could be complete without a process in place for evaluating infrastructure plans. The report suggests five guidelines for evaluating plans, including beginning project planning early, allocating enough resources for investment evaluation, facilitating public review in the evaluation process, and establishing a technical and independent evaluation of infrastructure investments.

CCSCE Director Steve Levy commented that "The best role for state government must reflect what other infrastructure partners - local and regional agencies, the federal government and California's private and non-profit sectors - can bring to the table." The report notes that the federal government does not have a capital spending plan and that other states are facing the same long-term planning challenges as California.

The report was commissioned by Californians and the Land, a collaboration of the William and Flora Hewlett Foundation, the James Irvine Foundation, the David and Lucille Packard Foundation, Bank of America, the Wendy P. McCaw Foundation, and Environment Now. For more information, contact CCSCE's Director, Steve Levy, at 650-321-8550. For a free copy of the report write Californians and the Land, 916 L Street, PMB-C256, Sacramento, CA 95814 or link from the CCSCE website at http://www.ccsce.com .
 

House Names U.S. Salinity Lab For Rep. George Brown

Due to the years of support that the late Congressman George Brown provided to the U.S. Salinity Laboratory at the University of California, Riverside, the House has moved to rename the lab The George Brown Salinity Laboratory. Sponsored by Congressman Ken Calvert (Coronado) and Congressman Jerry Lewis (Redlands), legislation to rename the lab was approved by the House on Friday, October 1. Congressman Brown's congressional colleagues from the Inland Empire praised the bill as an acknowledgment of Brown's use of science and technology to better the lives of many.
 

CCSCE Releases Outlook of California's Economy

The Center for Continuing Study of the California Economy (CCSCE) released a new report on California's current economic condition and projections for California's economic future. The report, The Outlook for the California Economy, by Stephen Levy and Robert K. Arnold highlights California's strong economic growth while predicting a slowing in the growth of jobs, income and spending in the next twelve months. While California will still show considerable short term growth, CCSCE predicts that job growth will slip from its current 1998-99 level of over 3 percent. This slowed growth, however, may be partially due to a slower overall national economic growth. For these insights and other predictions of the national and regional economic outlook, contact CCSCE via its web site at http://www.ccsce.com or call 650-321-8550.
 

California Businesses Produce More Employee & Payroll Growth than National Average, According to Census Report

In its annual "County Business Patterns" report issued this week, the U.S. Census Bureau found that California created 432,000 new jobs in private businesses between March 1996 and March 1997. As total employment climbed to 11.6 million employees, the state's workforce growth accounted for 14% of the nation's 3.1 million new private sector jobs. The total number of business establishments in the state rose by 15,531 or 2.1% to 766,000 over the two-year period, a growth rate slightly below the nation's overall 2.3% growth in businesses.

California's payroll, however, grew faster than the rest of the nation's, climbing $26.1 billion or 7.6% to $371 billion, compared to the nation, whose payroll grew by 7.0% or $199 billion to surpass the $3 trillion mark for the first time.

The report found that more new jobs were created in Los Angeles County than any other county in the nation. While an unsurprising finding about the nation's largest county, it is nevertheless an encouraging sign that the ravages of this decade's recession continue to fade for hard-hit Southern California. The Bureau reported that L.A. County was the site of 119,000 of the nation's 3.1 million new jobs created between 1996 and 1997. Total employees in the county rose 3.4% to 3.6 million, while the nation increased 3.0% to 105.3 million. Illustrative of the county's improving economy was the finding that 119,000 jobs were created while the county's population rose by only 60,000. L.A. County payrolls grew by $6.4 billion or by 5.9% to nearly $116 billion.

Elsewhere in California, Santa Clara County saw a 10.8% rise in private payroll expenditures from 1996 to 1997, and a 5.6% increase in the number of employees. San Diego County's $2.1 billion increase in payrolls was an 8.8% rise, while the total number of employees rose 3.7% or by nearly 33,000. And Orange County saw $2.2 billion (6.0%) growth in payroll and 44,000 (3.8%) growth in total employees.

Detailed data (in a 216-page "pdf" file) for all 58 California counties are available at http://www.census.gov/prod/99pubs/cbp97/cbp97-06.pdf . The national figures are available as well (via a 103-page file) at http://www.census.gov/prod/99pubs/cbp97/cbp97-01.pdf .
 

State's Uninsured Rate Exceeds, Climbs Faster Than U.S. Rate

According to data released this week by the Census Bureau, the share of California's population lacking in health insurance is one third again higher than the national rate, and continues to rise. In 1998, the Bureau found that 22.1% of Californians were uninsured, compared to 16.3% nationwide. The state's rate was an increase from 21.5% in 1997 and 20.1% in 1996. Of California's 33.4 million people, 7.37 million were uninsured in 1998, accounting for 16.65% of the nation's 44.3 million persons without health insurance. For the full report, go to http://www.census.gov/hhes/www/hlthin98.html .
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