Omnibus Appropriations Conference Report Approved -- California Capitol Hill Bulletin -- Volume 10, Bulletin 3 -- February 14, 2003

Late on Wednesday, February 12, 2003, congressional negotiators agreed to a $397.4 billion FY03 Omnibus Appropriations Conference Report, H.J. Res. 2, which incorporates the eleven unfinished appropriations measures for non-military domestic spending into one package. After more than four months of passing temporary stop-gap spending measures to maintain government operations, the House passed the bill late Thursday by a vote of 338-83, after the Motion to Recommit failed by a largely party line vote of 193-226. The Senate is expected to pass the bill before adjourning for the Presidents' Day recess, which begins on Friday.

The final funding level is about $11.5 billion more than the $385.9 billion limit the White House had imposed on Congress last week. In order to offset some of the additional spending for education and other programs, the bill includes a 0.65 percent across-the-board spending cut. However, Head Start, the Space Shuttle program, VA medical care, and the Women Infant and Children's (WIC) program are exempted from the spending cut.

Details on specific programs within the 1,100-page bill are still sketchy, as the Conference Report will not be formally printed in the Congressional Record until at least Friday, February 14 and the electronic versions currently available are not searchable. The following summarizes some of the major provisions in the bill of particular concern to California that have been identified thus far.

Commerce-Justice-State

Spending for the Departments of Commerce, Justice, and State are basically held at FY02 levels. Total funding for discretionary spending is set at $41.3 billion, compared to $41.4 billion in FY02 and the President's request of $41.8 billion. The State Criminal Alien Assistance Program (SCAAP) will receive only $250 million in funding, as opposed to the $565 million appropriated in FY02. The program partially reimburses the states for the costs of incarcerating undocumented criminal aliens. California receives almost 40 percent of the funding; in FY02 the State, county and local governments received $220.24 million in SCAAP funds.

A total of $2.065 billion is provided for State and Local Law Enforcement Assistance. The Local Law Enforcement Block Grant program is level funded at $400 million, and Byrne grants are funded at $650,914,000, of which $150,914,000 is for discretionary grants. The Conference Report also stipulates that the following California programs be considered for Byrne Discretionary Grants:

$1.3 million for the San Joaquin Valley Rural Agricultural Crime Prevention Program;

$200,000 for San Marcos for a community policing initiative;

$1.5 million for the City of Los Angeles for the Community Law Enforcement and Recovery anti-gang program;

$1 million to expand the LA Community Law Enforcement and Recovery anti-gang program to the Hollenbeck division;

$500,000 to the LA Community Development Commission to expand its crime safety program;

$200,000 for the Solano County multi-jurisdictional response team;

$80,000 to the Marysville police department for a mobile command center; and

$180,000 for the Homeless Outreach Team in San Diego.

$40 million is also provided for the Southwest Border Prosecution program under the Community Oriented Policing Services account.

The Conference Report also provides $3.5 billion in assistance to state and local First Responders; $2.4 billion in the Commerce-Justice section of the bill and $1.1 billion in the VA-HUD and Independent Agencies section.

Immigration enforcement activities will receive $6.159 billion. The bill fully funds at $362 million the Entry Exit program to track the arrival and departure of non-U.S. citizens, and removes a funding prohibition on the National Security Entry Exit Registration System. Additional funds of $57 million are also included to hire another 570 Border Patrol Agents, and $25.5 million in addition funds is provided to hire 460 land border Immigration Inspectors. The bill also funds the hiring of 760 new airport and seaport inspectors and support personnel. After the new hires, the total number of Border Patrol Agents will be 11,000. $14 million in funding is also provided for construction of the Border Patrol Station at El Centro, and $1 million is appropriated for San Diego Border Barriers.

Interior

Funding for the Department of the Interior also remains relatively flat compared to FY02 funding, and below the President's request. The Omnibus contains $19.1 billion in funding, whereas President Bush had requested $19.5 billion, and FY02 funding was $19.2 billion. The majority of the decrease in spending comes from the Department's conservation programs, which are cut by $200 million, 15 percent less than FY02. The Payment in Lieu of Taxes (PILT) program will receive a $10 million increase to $220 million in FY03 funding.

The bill provides $26 million in funding for the Quincy Library Group.

Energy and Water

Energy and Water programs will be boosted from $25.30 billion in FY02 to $26.16 billion in FY03, about $300 million more than the President requested. The Conference Report provides $917 million for the Bureau of Reclamation, an increase of $72 million over the President's request and $2 million above the FY02 level.

California Bay-Delta projects will receive $23 million under the bill, as opposed to the $30 million contained in the Senate version. Funding for the Environmental Water Account was decreased from $15 million to $9 million. The conference report also retains the Senate language authorizing the Interior Department and other federal agencies to continue to participate in the CALFED Bay-Delta Authority. Interior is also authorized to undertake feasibility studies for the Sites Reservoir, Los Vaqueros Reservoir Enlargement, and Upper San Joaquin Storage projects. Language providing for a feasibility study of In-Delta Storage, however, was dropped. The provision also calls for these studies, as well as environmental and other projects, to be pursued in a balanced manner.

The Corps of Engineers will receive $4.6 billion, $28 million less than FY02, but $457 million over the President's request. Among the projects specifically funded are: $1 million for the Napa River Salt Marsh Restoration project; about $3 million to complete the feasibility study and initiate preconstruction engineering and design for the Sacramento and San Joaquin Comprehensive Basin Study, as well as an additional $2 million for Corps projects in the Sacramento area. The report does not include specific funding for the Port of Stockton study requested by the House, but states that funds for this are included in the San Francisco to Stockton project under the Construction, General, account. $4.5 million is also provided for the Coastal Field Data Collection Program, of which $1 million is for the Southern California Beach Processes study.

Energy

Funding for fusion energy sciences, of which California perennially wins the lion's share, will rise from $241 million in FY 2002 to $250 million in FY 2004. However, the amount is below the total proposed in the President's budget.

High energy physics would receive $706.9 million under the conference agreement, and basic energy sciences research would receive $772.9 million. The agreement provides $6 million for engineering design and construction at the Stanford Linear Accelerator Center. It also provides $172.6 million for advanced scientific computing research.

A National Nuclear Security Administration construction account for advanced simulation and computing provides $13.3 million for construction of a distributed information systems laboratory at Sandia National Laboratory in Livermore, and $35 million for a terascale simulation facility at Lawrence Livermore Lab.

Readiness construction funding is provided for various projects, including $10 million for an engineering technology complex upgrade at LLNL, $113 million for a microsystems and engineering sciences applications complex at Sandia, $9.6 million for a sensitive compartmented facility at LLNL, $4 million for isotope sciences facilities at LLNL, and $5.9 million for roof reconstruction at LLNL.

Within an overall total of $504.3 million for inertial confinement fusion, the conference agreement provides an additional $8 million for enhanced National Ignition Facility (NIF) diagnostics and/or cryogenic target activities, and $214 million for continued construction of the NIF. For petawatt laser capabilities, the conference agreement provides $5 million to modify the beamlet laser at the Sandia National Laboratories and $1 million for community activities in developing critical short-pulse, high power laser technology. The agreement provides an additional $3.5 million for university grants/other ICF support For advance simulation and computing, the agreement provides $704 million.

The agreement provides $22 million for to accelerate cleanup activities at Lawrence Livermore National Laboratory.

Education - Elementary and Secondary Education

The conference agreement provides a $1.4 billion increase in Title I funding, bringing the total to $11.75 million.

The agreement provides no increase in the traditional components of Title I focusing 100 percent of the increase on two relative newcomers to the Title I formula funding mix: targeted grants and EFIG. The Administration proposes $7.2 billion - the same funding level as in FY 2002 - for Title I basic grants. Likewise, the conference agreement would retain the FY 2002 level for Title I concentration grants, providing $1.365 billion.

For the two Title I formula elements that have only recently received funding, the agreement calls for spending of $1.67 billion for Title I's "targeted grants" component and $1.545 billion for education finance incentive grants or EFIG. (The two programs were funded for the first time in FY 2002 pursuant to a conference amendment by Sens. Mary Landrieu (LA) and Thad Cochran (MS) in 2002. Congress provided $1.018 billion for newly-funded targeted grants, and $793 million in first-time funding for EFIG.)

An analysis of the four primary grant components of Title I (basic, concentration, targeted, and EFIG) showed that California generally would receive the highest portion of funds from targeted grants, and the lowest share from EFIG. Fortunately, Congress recently changed an EFIG formula factor in order to count only children in poverty, as opposed to all children -- a shift which will improve the share of program dollars for California, which houses a higher percentage of poor children than of children overall. Nevertheless, EFIG grant shares will still be calculated in part on state average per-pupil expenditure and tax effort for education, both of which cut California's share, and its state per capita income factor will also reduce the share.

For the Impact Aid programs, which support schools in areas where the local tax base is reduced by significant federal properties such as military bases, the conference agreement provides $1.196 billion in total funding, with $1.032 billion allocated to basic payments (up from $983 million in 2002), and $51 million for "Part B" payments for children with disabilities (up slightly from $50 million in 2002). The remaining funds are proposed as follows: $8 million for facilities maintenance, $45 million for construction, and $60 million for federal property payments. Because of the dwindling presence of military bases in the state following four rounds of base closures, California's typical share of Impact Aid funds has declined from about 10% to about 7% over the past few years.

The Conference Report includes the Senate's $690 million (higher than the House figure of $665 million) for English Language Acquisition programs, formerly known as Bilingual and Immigrant Education. With funding levels remaining above a pre-determined trigger hreshold, the program will continue use of a new formula for distributing the funds, which is likely to benefit California. Allocations for the English Language Acquisition and Language Enhancement grants are now based 80% on states' relative share of children considered limited English proficient (LEP) and 20% based on states' share of immigrant children, and California's share of both factors is high.

For Special Education, the conferees agreed on $10.1 billion, above the House's $9.2 billion but below the Senate's $11.2 billion, and in any case well above the $8.6 billion figure for 2002. The largest portion, $8.9 billion, would be allocated to Special Education Grants to States, up from $7.5 billion in FY 2002. California typically receives roughly 10% of special education state grants funding. The agreement does not provide the additional $1.5 billion proposed by the Senate for the Individuals with Disabilities Education Act.

The agreement provides $2.96 billion for Rehabilitation Services and Disability Research, an increase of roughly $100 million from the FY 2002 funding level. The vast majority of funds for this account are used for the Vocational Rehabilitation State Grants program, California typically receives roughly 10% of funds for vocational rehabilitation state grants. Within $21 million for vocational rehabilitation demonstration and training programs, the bill earmarks $145,000 for the City of Carson for rehabilitation and related services at the Joseph B. O'Neal Jr. Stroke Center.

For Vocational and Adult Education, the agreement provides $1.96 billion, higher than both the House's $1.92 billion and the Senate's $1.94 billion. For Vocational Education State Grants, the conference agreement provides the House's $1.2 billion level, rather than the Senate's recommendation of level funding at $1.18 billion (California's share of voc-ed basic grants is typically about 11%). Tech Prep education is funded at $110 million, and the tech-prep education demonstration at $5 million.

Education - Student Financial Assistance and Higher Education

The conference agreement provides $11.44 billion for Pell Grants, higher than either the House's or the Senate's $11.2 billion. The maximum Pell Grant would rise from $4,000 to $4,050 for award year 2003-2004. Report language renews a call for the U.S. Department of Education to report to Congress regarding the feasibility of implementing a system whereby some students could receive two Pell grants in a single calendar year. The agreement also boosts funding for the Supplemental Educational Opportunity Grant (SEOG) to $765 million from the $725 million proposed by both the House and Senate (and which had been the FY 2002 level).

For Higher Education programs, the conference report provides $2.1 billion, above the Senate's $2.0 billion and the House's $1.9 billion levels, including a rise from $86 million in 2002 to $93 million in 2003 for developing Hispanic-serving institutions.

The conference agreement provides the higher Senate figure of $832.5 million for the TRIO program. For GEAR UP, the agreement also provides the higher Senate figure, $295 million.

Transportation

Conferees propose a total appropriation of roughly $64.5 billion for FY2003 transportation programs. Federal highways programs spending levels are set at $31.8 billion, the full amount sought by transportation advocates and proposed by the Senate. This figure is $896 million above the FY2002 allocation, $4.1 billion above the House appropriation level and $8.6 million above President Bush's budget request based on estimated FY 2003 obligation authority distributions through the Revenue Aligned Budget Authority (RABA) funding mechanism laid out in transportation law.

The National Railroad Passenger Corporation, otherwise known as Amtrak, receives $1.05 billion in funding for FY2003, $150 million less than its officials say it needs to remain fully operational. In an effort to improve oversight and responsible fiscal management of the debt-burdened corporation, Amtrak is required to develop Congressionally reviewed financial reporting plans. Omnibus language also empowers the Secretary of Transportation to control Amtrak funds (rather than assigning funds directly to Amtrak) and review and approve grant requests for specific long-distance train routes. The figures for Federal Aid Highway Programs and Amtrak are by and large consistent with levels California Governor Gray Davis requested in a letter issued to Delegation members late last month.

The Federal Aviation Administration is allocated $13.6 billion, $87 million above the previous year's appropriation.

Conferees allocated $5.2 billion for the Transportation Security Administration's civil aviation security activities. This new agency was created in the aftermath of September 11^th upon the enactment on November 19, 2001 of the Aviation and Transportation Security Act. The TSA is designed to improve security for all transport systems across the US including aviation, railways, highways, pipelines and waterways.

Agriculture

The Omnibus Conference bill allocates $22.1 billion in discretionary funding for agricultural programs, $2.2 billion less than FY'02 expenditures. After stalling on negotiations over farmer drought assistance levels, Conferees agreed to $3.1 billion in farm relief to be drawn from existing programs rather than through budgetary augmentation.

Animal Plant Health and Inspection Services (APHIS) are appropriated $726 million, $105 million above last year's levels. APHIS is tasked with conducting inspection, quarantine, and regulatory activities in response to animal and plant diseases and to protect the environment.

$907,737,000 is appropriated for the Rural Community Advancement Program with $723,217,000 to be made available for rural utilities activities. Of funds provided for the Rural Utilities Program, the agreement provides $25 million to assist Colonias communities along the US-Mexico border to improve the quality of water and waste disposal systems.

The Conference Report appropriates $10,580,169,000 for Children's Nutrition Programs. Furthermore $26,313,692,000 is provided for Food Stamp expenditures.

Conferees recommend $4.696 billion for the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), $348 million above last year's appropriation. Of this total $125 million is set aside as reserve funds while the Farmers' Market Nutrition Program is funded at $25 million. This program provides certified farmers' markets coupons to participating women and children redeemable for fresh fruits and vegetables. The purpose is to provide WIC participants with fresh fruits and vegetables while promoting use, awareness, and sales of local community-based farmers' markets.

The bill also includes a $3.1 billion drought assistance package, which had tied up approval of the conference report earlier in the week. A House-Senate agreement was reached on eligibility for, and distribution of, the funds to farmers and ranchers.

VA/HUD & Independent Agencies

The Omnibus Conference Report provides $121.9 billion for the Department of Veterans Affairs, the Department of Housing and Urban Development, and Independent Agencies.

Conferees agreed to provide $36.3 billion for the Department of Housing and Urban Development, $1.8 billion above the previous year's allocation. This Department is responsible for managing the nation's housing needs by administering programs to assist with fair housing opportunities, and community improvement and development activities.

For the HOME investment partnership program, the bill provides a total of $1.93 billion. California typically receives between 13% and 13.5% of HOME formula funding. $75 million is appropriated for a new Downpayment Assistance Initiative proposed by President Bush.

Public Housing Operating Subsidies levels are set at $3.6 billion by Conferees; whereas $1.23 billion is appropriated for homeless assistance. This includes full funding for Shelter Plus Care renewals.

The Environmental Protection Agency is appropriated $8.1 billion, with the Superfund hazardous waste cleanup program share remaining consistent with FY2002 levels at $1.3 billion. Language is included in the Conference Report placing greater emphasis on funding state grants to improve water quality.

Conferees propose providing NASA with $15.4 billion, $513 million above last year's levels, of which $50 million would be provided for Space Shuttle Columbia investigation costs. NASA is also exempted from across-the-board spending cuts affecting most other Omnibus programs. Conference language also provides added flexibility to NASA officials for shifting funds across programs to facilitate resource maximization.

Under the Conference Report, funding for the National Science Foundation would reach its highest levels ever with a total appropriation of $5.3 billion. This includes $4 billion for research; $150 million for research, equipment and construction; and $909 million for education and human resources.

Health and Human Services

The FY03 conference bill allocates $130.9 billion in discretionary funding and $421.6 billion in total funding, including mandatory spending, for the Department of Health and Human Services, Department of Labor, and Department of Education. The FY03 amount is $3.3 billion higher than the spending level appropriated in FY02, and corresponds to the same amount that the administration requested in its FY03 budget proposal.

The conference bill provides $27.2 billion to fund the National Institutes of Health (NIH). The FY03 conference bill amount is $3.8 billion higher than the appropriation made last year. The administration has requested $29.8 billion funding in its FY04 budget proposal.

The bill appropriates $4.3 billion for the Centers for Disease Control. The FY03 funding level is $288 million above the administration's budget request, and is $107 billion less than the amount provided in FY02.

The Low Income Home Energy Assistance Program is funded at $1.7 billion for the formula grant portion. The funding provided for LIHEAP in the conference bill is $300 million higher than the amount requested in the President's FY03 budget proposal, and $100 million less than the FY02 appropriation. The administration requested $1.85 billion in funding for this program in FY04.

The conference bill provides $1.5 billion in funding for Community Health Centers. The FY03 funding level is an increase of $171 million over the amount appropriated in FY02.

To subsidize the states for administering the refugee assistance programs, the conference bill appropriates $437 million, which is $41million less than the $478 million appropriated in FY02. The administration requested $472 million for the Refugee and Entrant Assistance in its FY04 budget proposal.

The conference bill appropriates $2.1 billion in funding to supplement state general revenue funds for child care assistance for low-income families.

For the Social Services Block Grant, the conference bill appropriates $1.7 billion, which is the same amount that the administration has requested for FY04.

The conference bill appropriates $8.643 billion to fund Children and Families Services Programs, which includes: $6.668 billion for the Head Start Program; $91 million for the Homeless and Runaway Youth Program, which is an increase of $43 million over the $48 million funding level appropriated in FY02; $35 million for the "Compassion Capital Fund", which is an increase of $5 million over the FY02 appropriation of $30 million, to fund qualified charitable organizations that wish to expand or emulate model programs.

The conference bill appropriates $6.6 billion in funding for foster care and adoption assistance payments to the states. This amount represents an increase of $531 million over the $6.069 billion allocated for such payments in FY02.

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