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House Passes FY 2017 Interior-EPA Spending Bill

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On July 14, the House of Representatives passed its version of the FY 2017 Interior, Environment and Related Agencies appropriations bill, often referred to as the Interior Bill.  The bill passed the House on a largely party-line vote of 231 - 196.  The FY 2017 Interior Bill is one of the 12 annual spending bills that must be passed each year by congress to fund federal government operations.  The bill provides funds to federal land managers under the U.S. Department of the Interior (DOI) and the U.S. Forest Service, as well as the U.S. Environmental Protection Agency (EPA) and many other agencies. 

This was the first time since 2009 that an Interior Appropriations bill passed in the House. In previous years, the bill was bogged down due to controversial amendments.

The overall funding level for the bill is approximately $32 billion, a $64 million decrease below FY 2016 enacted levels.   Of note to many counties, the bill included legislative language to prohibit implementation of the “waters of the U.S.” (WOTUS), delay implementation of the Bureau of Land Management’s (BLM’s) Planning 2.0 Rule and fully fund the Payments in Lieu of Taxes (PILT) program at a level of $480 million.  During floor consideration, NACo actively fought floor amendments that would have reduced funding for the PILT program.  

As reported by the House Appropriations Committee, the Interior Bill provides a slight increase over FY 2016 for the National Park Service, proposing $2.9 billion in FY 2017.  For the Bureau of Land Management (BLM) the House proposed a $10 million funding decrease to $1.2 billion.  The House also proposed modest cuts to the FY 2017 budget of the U.S. Fish and Wildlife Service (FWS) setting the final spending limit for FWS at approximately $1.5 billion.  The U.S. Forest Service, which is under the U.S. Department of Agriculture, would receive $5.3 billion in the House bill.  The bill also fully funds the 10-year average for wildfire suppression costs and includes targeted funding for wildfire fuel reduction.   

Under the House bill, funding for the EPA would be slashed. The House Interior Bill would allot EPA $7.98 billion, which is $64 million less than FY 2016 levels and $291 million less than the Administration request. 

The fate of the Appropriations process remains uncertain as both chambers recess for the party political conventions and annual summer district work period. While leaders of both chambers have expressed a desire to pass and conference together their respective Interior Bills, the President has already threatened to veto the House bill.

Key provisions of interest to counties within the bill include:

  • PILT: The House Interior bill fully funds the Payments in Lieu of Taxes (PILT) program in FY17 at a level of $480 million.  The PILT program was created in 1976 to offset costs incurred by counties for services provided to federal employees and families, the public and to the users of public lands. 

  • Wildland Fire: The bill includes full funding for wildland fire suppression costs at 100 percent of the 10-year average and targeted funds to support proactive hazardous fuels reduction across the federal forest system.     

  • Sage Grouse: The bill includes provisions to extend a 1 year delay of Endangered Species Act (ESA) listing decisions for the Greater Sage Grouse and a $12 million increase for the BLM to support Sage Grouse conservation activities while avoiding broad sweeping land use restrictions. 

  • Planning 2.0: The measure would also withhold funding to implement the BLM’s Planning 2.0 rule until BLM has reopened the public comment period for an additional 90 days and has held in-person public meetings on the rule in each of twelve impacted western states, Texas and Oklahoma.  NACo and many county governments continue to express concerns over the limited amount of time county governments were given to provide meaningful input on the BLM’s proposed rule.   

  • Land/Water Conservation: The House bill provides $322 million for LWCF programs, a reduction of $128 million below the fiscal year 2016 level and $153 million below the President’s request. Within LWCF Funds proposed by the House, State and local recreation and battlefield preservation programs are prioritized, with State Conservation Grants receiving $71.8 million in FY 2017 and $10 million for battlefield protection.  

  • Water Infrastructure Funding: Under the House bill, Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF) programs would receive a combined sum of $2.07 billion, of which $1 billion would be allotted to the CWSRF, and DWSRF would receive $1.07 billion. NACo supports funding for both CWSRF and DWSRF programs.  The CWSRF program funds municipal wastewater infrastructure construction or upgrade projects and the DWSRF program supports Safe Drinking Water Act (SDWA) infrastructure projects. 

  • Leaking Underground Storage Tank Program: The Leaking Underground Storage Tank (LUST) Program provides grants to the EPA and states to undertake cleanup responsibilities around abandoned gasoline and petroleum storage sites. The House version of the Interior bill provides $68 million for the LUST program. NACo supports full funding for the LUST program if those funds are used for their intended purpose of remediating and preventing further contamination caused from underground storage tanks.

  • “Waters of the U.S.” (WOTUS): The House bill contains a provision to prohibit the EPA from acting on its WOTUS rule. The provisions would prevent the EPA from moving forward to “implement, administer, or enforce” the rule even if the federal court system were to lift its stay on the rule. The House Energy and Water Appropriations bill, which funds U.S. Army Corps of Engineers (Corps) and Department of Energy programs, has a similar provision preventing the Corps from enforcing the WOTUS rule. 

  • Additionally, the House measure includes $50 million for the Water Infrastructure Finance and Innovation Act (WIFIA), which was enacted in 2014 but never funded. WIFIA is a five-year financing program that allows EPA to provide direct loans and loan guarantees for the construction of large water infrastructure projects. NACo support funding WIFIA because it has the potential to significantly lower water infrastructure costs for large projects.

Last year, the U.S. Army Corps of Engineers and the EPA finalized controversial new definitions for “waters of the U.S.” within the Clean Water Act. NACo has expressed multiple concerns over the rule's impact on county-owned and maintained roadside ditches, bridges, flood control channels, drainage conveyances and wastewater and storm water systems and has called for the final rule to be withdrawn until further analysis and more in-depth consultation with state and local officials be completed. Almost immediately after the WOTUS rule was finalized in 2015, numerous lawsuits were filed across the nation and the 6th Circuit Court of Appeals placed a temporary stay on the rule.

Additionally, during Floor consideration, the House considered 131 floor amendments to the Interior bill covering a variety of topics.  Of particular importance to counties:

  • An amendment by Rep. Norcross (D-N.J.) that would have reduced funding for the PILT program by $13,060,000 and transferred those funds to the EPA’s Superfund program was defeated by a vote of 143 - 282.  NACo has expressed strong opposition to any amendment that would reduce funding for the PILT program, which funds critical county services in nearly 1,900 counties across 49 states. 

  • An amendment by Rep. Lawrence (D-Mich.) that would have removed the 1 year moratorium on implementation of the Waters of the U.S. rule was offered and withdrawn. 

  • An amendment by Rep. Blackburn (R-Tenn.) that would have implemented a 1 percent reduction in funding levels across the Interior Bill, including for the PILT program, was defeated by a vote of 171 - 258.  NACo strongly opposed all amendments that would have reduced funding for PILT.

  • An amendment offered by Rep. Bradley Byrne (R-Ala.) passed by voice vote to prevent the Administration from changing revenue sharing agreements in the Gulf of Mexico Security Act (GOMESA) of 2006. Under GOMESA, Alabama, Louisiana, Mississippi and Texas each receive 37.5 percent of federal oil revenues that occur off of their coast. The Administration has proposed to change the formula so that the money would go to climate projects in all states. NACo believes that states and counties, that support and encourage oil and gas production off their shores, should receive a share of the revenues proportionate to the royalties generated.

  • An amendment by Rep. Bob Goodlatte (R-Va.) to prohibit the EPA from punishing any of the six Chesapeake Bay Watershed states if the states do not meet the goals set in EPA’s Total Maximum Daily Load (TMDL) program in the Bay, passed by 231-197. NACo does not currently have policy on this, however, but NACo members will be debating a resolution on this issue at NACo’s Annual Conference.

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