Special Report: California Implications of January 2009 Economic Stimulus Measures

House Appropriations Committee Spending Items — January 23, 2009

     House Committees began considering their portions of an $825 billion economic stimulus plan (H.R. 598) on Wednesday, January 21, 2009, with the House Appropriations Committee taking the lead and reporting funding under its jurisdiction by a vote of 35-22. The Appropriations Committee maintains jurisdiction over $358 billion in discretionary spending in the bill.

     Below is a summary of some of the major provisions in the Appropriations bill. As other Committees with jurisdiction, such as Ways and Means and Energy and Commerce, report their sections of the bill, and as the Senate takes action, the Institute will update its reporting.

     In addition to the below narrative, the California Institute is preparing a spreadsheet detailing Appropriations components of the stimulus package. The table will be available at http://www.calinst.org/pubs/2009StimulusTable.shtml. A more basic pdf version of the table table is now available at http://www.calinst.org/pubs/2009StimulusTable.pdf.

[Note that another significant portion of the bill was developed by the Energy and Commerce Committee (largely energy provisions) and the Ways & Means Committee (tax and health care provisions). The California Institute prepared a report detailing energy, health, and tax components of the stimulus package, at http://www.calinst.org/pubs/2009stimulustax.shtml or at http://www.calinst.org/pubs/2009stimulustax.pdf.]

Agriculture, Nutrition and Rural Development

Commerce, Justice, Science


Energy and Water

Homeland Security

Interior And Environment

Labor, Health and Human Services, and Education

Transportation, Housing and Urban Development

Military Construction

State Fiscal Stabilization Fund

Agriculture, Nutrition and Rural Development


     The Department of Agriculture would receive $44 million in priority repair, maintenance, and improvement projects, and the  Agricultural Research Service (ARS) would receive $209 million in funding for critical deferred maintenance work.

     $245 million would be allocated to improve the Farm Service Agency’s existing information technology systems.

     The Natural Resources Conservation Service’s (NRCS) Watershed and Flood Prevention

Operations Program would receive $175 million to fully fund the costs of approximately 60 flood prevention and water quality improvement projects and $175 million in funding to complete work on a substantial portion of the flood plain easement and restoration projects already identified as necessary by the agency. $50 million of the funding would be provided to fund watershed rehabilitation projects administered under the NRCS’ Watershed Rehabilitation Program.

Nutrition Assistance Programs

     The Supplemental Nutrition Assistance Program (SNAP) participants will receive a 13.6-percent benefit increase for SNAP participants in the fiscal year 2009, to help match expected food inflation-rates. SNAP was previously known as the Food Stamps program. An additional $300 million is provided to states to administer the program and to help meet expected program demand increases.

     The Afterschool Feeding Program for At-Risk Children and the Child and Adult Care Food Programs (CACFP) were also expanded to include all states. CACFP currently only authorizes seven states to provide suppers in after-school care programs, while other states (including California) are only able to serve snacks. This proposal would allow all states, including California, to expand services to include an evening or weekend meal to an identified population of children in need.

     An additional $100 million in funds will be used to create and improve management information systems for the Supplemental Nutrition Assistance Program (SNAP) in an effort to improve program delivery and to help expand the implementation of the electronic benefit transfer capabilities.

Rural Development

     This package would provide an additional $200 million in funding annually to the Rural Community Facilities Program. The total program cost is $1.239 billion.

     The Guaranteed Business and Industry Program would receive an additional $100 million in funding to permit assistance to an additional 928 business. The total cost of the program is $2.013 billion. Funding is also provided for the Rural Business Enterprise Grant Program.

     The rural water and waste grant and loan programs, which serve rural areas with populations of 10,000 or less, would receive an additional $1.5 billion for a total program level of $3.836 billion. The additional funding will help support 3.4 million rural households with new or improved service.

     The USDA would receive an additional $500 million for the USDA guaranteed home loan and direct housing loan programs to help meet the demand caused by the credit crunch and needs of backlog of unfunded applications on hand totaling $2.6 billion. The total cost of the USDA home loan programs would be $22.129 billion.

     Rural Broadband Infrastructure Development program would receive $2.825 billion to promote and expand “open access”broadband networks and to enhance the communication capabilities necessary for continued economic growth, specifically in rural areas.

Commerce, Justice, Science

     Economic Development Administration – Economic Development Assistance Programs

will receive $250 million in funding

     National Telecommunications and Information Administration – The State Broadband Data and Development Grants program will receive $350 million; Wireless and Broadband Development for Unserved and Underserved Areas will receive $2.825 billion. $650 million will be provided for Digital-to-Analog Converter Box Coupons.

     National Institute of Standards and Technology – Scientific and Technical Research and Services will receive $100 million; the Manufacturing Extension Partnership and Technology Innovation Program will receive $100 million; $300 million will go to Research Science Building Construction Grants.

     National Oceanic and Atmospheric Administration – Habitat and fisheries restoration will receive $400 million

     State and Local Law Enforcement Assistance – Byrne Justice Assistance Grants (JAG)

will receive $3 billion. The Community Oriented Policing Services (COPS) hiring program will be provided $1 billion in funding, which will allow hiring about 13,000 new police officers for three years.

     National Aeronautics and Space Administration – Science funding will be $400 million and Aeronautics funding $150 million. Disaster assistance rebuilding efforts will get $50 million.

     National Science Foundation – Research and related activities will receive $2.5 billion and Education and Human Resources activities will receive $100 million. $400 million will also be available for construction and development of major research equipment and facilities.


     Sustainment, Renovation and Modernization of Defense Facilities – $4.5 billion

     DOD Energy Research – $350 million.

Energy and Water


     Corps of Engineers – $4.5 billion is provided. Of the amount provided, $2

billion is allocated to the Construction account; $250 million to the Mississippi River and

Tributaries; $2.225 billion to Operation and Maintenance; and $25 million to Regulatory

     Department of Interior

     Bureau of Reclamation – Water and Related Resources will receive $500 million for capital improvements, including funds to provide clean, reliable drinking water to rural areas and for water reuse and recycling projects to ensure adequate water supply to western localities impacted by drought.


     General provisions of the proposed package include:

– technical corrections to the formula for the Energy Efficiency and Conservation Block Grant Program

– amendments to EISA, Title 13 that eliminate the cap of 6 demonstration projects, and that substitute a grant program for a reimbursable program to help expedite the timing of smart grid projects

– amendments to Title XVII of EPACT 2005 that create a temporary stimulus loan guarantee program for renewable energy and electric power transmission projects; the subsidy cost is funded through appropriations and the provision sunsets in 2011

– provisions which provide the Western Area Power Administration (WAPA) with $3.25 billion in borrowing authority to expand transmission infrastructure to help connect renewable energy generation to the grid,

– increases to the income level criteria for Weatherization Assistance Grants from 150 percent of poverty to 200 percent of poverty; and increases the cap on dwelling assistance from $3,055 to $5,000,

– provisions which give the Department of Energy discretion to transfer up to 20 percent of the

amounts allocated for the “Energy Efficiency and Renewable Energy”, “Electricity Delivery and Energy Reliability”, and “Advanced Battery Loan Guarantee” Programs within and between each of the programmatic accounts.

     A total of $2 billion would be allocated for renewable energy and energy efficiency research, development, demonstration and deployment, including $800 million for projects related to biomass and $400 million for geothermal activities and projects. $800 million would be used for programmatic activities, such as research and demonstrations for additional renewable energy technologies and energy efficiency demonstrations for industrial and commercial practices.

     $500 million would be allocated to create a waste energy recovery incentive program, aimed at encouraging the recovery of industrial waste heat and recycling it into useable heat and electricity.

     $1 billion in grants would be made available to institutional entities to identify, design, and implement sustainable energy infrastructure projects and grants for energy efficiency innovative technologies projects on grounds and facilities of institutions.

     The Weatherization Assistance Program would receive $6.2 billion to assist low-income families reduce their energy costs by sending funds to the states to weatherize their homes. The eligibility for this program would be expanded by increasing the maximum income from 150 percent to 200 percent of the poverty level and the allowable level of investment per home from $3,055 to $5,000 to achieve greater energy savings. Outdated formula grant factors have kept California’s share of the weatherization program below 5% of the U.S. total

     The Energy Efficiency & Conservation Block Grant Program would receive $3.5 billion to assist states, local governments and Indian tribes in implementing strategies to reduce fossil fuel emissions.

     The State Energy Program (SEP) would receive $3.4 billion to provide grants to states to address their energy priorities and to fund programs to adopt emerging renewable energy and energy efficiency technologies. California’s share of SEP is less than 5%.

     The Transportation Electrification program would receive $200 million to help transition the transportation sector towards electrification.

     The Energy Efficient Appliance Rebate and Energy Star programs would receive an additional $300 million in federal funds to increase program effectiveness and to encourage the states to adopt similar programs.

     Funding in the amount of $400 million would be allocated through the Clean Cities Program to establish an Alternative Fuel Vehicles Pilot grant program to encourage the use of plug-in electric drive vehicles or other emerging electric vehicle technologies. This grant program would provide up to 30 geographically dispersed project grants, and recipients would include state governments, local governments, metropolitan transportation authorities, air pollution control districts, and private or nonprofit entities.

     $1 billion would be allocated to help promote a new generation of vehicles by creating a grant program to support the manufacturing of advanced vehicle batteries. $1 billion would also be allocated to the Advanced Battery Loan Guarantee Program, which would support $3.3 billion in loans to manufacturers of advanced vehicle batteries and battery systems produced in the United States.

     The Smart Grid Investment Program would receive $4.5 billion to support research, development, pilot projects, and federal matching funds aimed at developing a modern electric grid, enhancing grid security and grid reliability.

     Funding in the amount of $500 million would be allocated for loans to institutional entities for identifying, designing and implementing sustainable energy infrastructure projects and grants for energy efficiency innovative technologies projects on grounds and facilities of institutions.

     A new, temporary $8 billion loan program would provide loan guarantees through September 30, 2011 for proven renewable technologies and transmission technologies. The program would allow the subsidy cost of the loans to be made through appropriations.

     $2.4 billion in funding would be allocated to provide for carbon capture and sequestration (CCS) technology demonstration projects.

     $2 billion would be allocated to support improvements to DOE laboratories and scientific facilities to provide the foundation for research and development efforts. Within this amount, $400 million would be included for the Advanced Research Project Agency.

     Funding in the amount of $500 million would be allocated to accelerate nuclear waste cleanup at sites contaminated as a result of the Nation’s past nuclear activities.

Small Business Administration

     Business Loans Program Account – Small Business Capital Availability will be funded at $430 million. Of the $430 million total, $426 million is for credit subsidy costs and $4 million is for administrative costs. The new authorities include: guarantees of up to 95 percent of small business loans; SBA loans to secondary market broker-dealers; refinancing of existing small business loans; SBA underwriting, loan closing, funding, and servicing; refinancing of community development loans under the SBA 504 program; and simplification of the maximum leverage limits and aggregate investment limits required of Small Business Investment Companies.

Homeland Security

     U.S. Customs and Border Protection – $100 million will be provided to upgrade or replace non-intrusive cargo inspection technology. $150 million will go to construction and modernization of land ports of entry facilities.

     Coast Guard – Hazardous Bridge Alteration, Repair, and Removal will receive $150 million.

     Federal Emergency Management Agency – the Emergency Food and Shelter Program will receive $200 million.

Interior And Environment

     Bureau of Land Management – $325 million is provided for the restoration and maintenance of the infrastructure under the Bureau’s jurisdiction and to support habitat restoration and hazardous fuels reduction projects.

     U.S. Fish & Wildlife Service – $300 million is provided for deferred maintenance and capital improvement plan projects.

     National Park System – $1.700 billion is provided for deferred maintenance and infrastructure projects.

     Environmental Protection Agency – The Superfund Remedial Clean-up Program will get $800 million; the Leaking Underground Storage Tank (LUST) Enforcement and Clean-up Program will receive $200 million. The Clean Water State Revolving Fund will receive $6 billion, and the Drinking Water State Revolving Fund will get $2 billion. Brownfields competitive grants will receive $100 million. Diesel Emissions Reduction Act (DERA) Grants and Loans will be funded at $300 million.

     U.S. Forest Service – $650 million is provided for Capital Improvement and Maintenance. Wildfire Hazard Reduction activities will get $850 million.

Labor, Health and Human Services, and Education


     $4 billion would be allocated to state and local workforces in the form of both discretionary grant programs and formula grants. $500 million would be provided for adult employment services; $1.2 billion would be provided for youth employment services; $1 billion would be provided for dislocated workers for training and re-employment services.   $500 million would be provided to respond to worker dislocations through national emergency grants.  $50 million would be provided to expand the YouthBuild program.  $750 million would be provided for a new program of competitive grants for worker training, $500 million of which would be designated for projects that prepare workers for careers in the energy efficiency and renewable energy industries specified in the Green Jobs Act of 2007.

     The Community Service Employment for Older Americans program would receive $120 million to provide grants to public and private nonprofit organizations in order to subsidize part- time work in community service for low-income seniors.

     $500 million would be allocated for State Employment Service and Re-employment Services Grants.

     The Department of Labor Worker Protection and Oversight would receive $80 million.

     $300 million would be allocated to the Job Corps, a program designed to help train at- risk-youth.


     Community Health Centers (CHCs) Health Care Services would receive $500 million. $1 billion would be awarded through competitive grants or supplements to existing CHC programs and awards.

     $600 million would be allocated for training for primary care physicians and nurses.

     $1.5 billion would be provided for renovation and repair of university research facilities through a competitive application process.

     $1.5 billion in funding will be allocated for biomedical research supported by the National Institutes of Health (NIH).

     The National Institute of Health would receive $500 million for campus modernization.

     $1.1 billion would be appropriated to the Agency for Healthcare Research and Quality for Comparative Effectiveness Research.

     The Low-Income Home Energy Assistance Program (LIHEAP) would receive $1 billion to help low-income households and seniors pay for home heating and cooling assistance.

     The Child Care and Development Block Grant (CCDBG) would receive $2 billion to support quality child care services for low-income families.

     Head Start/Early Head State would receive $2.1 billion to provide education, health, nutrition, and development services to low-income children.

     The Community Services Block Grant (CSBG) would receive $1 billion to support employment, food, housing, health, and emergency assistance to low-income families and individuals, the homeless, and the elderly.

     The Compassion Capital Fund would receive $100 million to provide grants to faith-based community organizations who serve low income communities.

     The Nutrition Service programs would receive $200 million provide formula grants to States for nutrition services to the elderly.

     The economic recovery bill provides $2 billion to jumpstart the investment in health information technology.

     $900 million would be provided to help address pandemic flu and to support biomedical advanced research and development and cyber security.

     $3 billion would be allocated to the Prevention and Wellness Fund.


     $13 billion would be allocated for Title I Grants to local educational agencies (LEAs) provide supplemental education funding, especially in high-poverty areas, for programs that provide extra academic support to help raise the achievement of students at risk of educational failure or to help all students in high-poverty schools meet challenging State academic standards. California’s share of Title I programs has declined recently to approximately 12 percent.

     $100 million in funds would be allocated to support school construction in local educational agencies.

     The Enhancing Education through Technology program would receive $1 billion to support State, district, and school efforts to integrate technology into curricula in order to improve teaching and learning.

     The Education for Homeless Children and Youth program would receive $66 million for formula grants to States to assist schools and districts with providing services for homeless children and youth.

     The Credit Enhancement for Charter School Facilities program would receive $25 million to provide assistance to help charter schools meet their facility needs.

     The Teacher Incentive Fund (TIF) program would receive $200 million for competitive grants.

     The IDEA Part B, Grants to States program would be allocated $13 billion to provide formula grants to assist the states in meeting the excess costs of providing special education and related services to children with disabilities. California’s share of IDEA State Grants is typically less than 11 percent. The Grants for Infants and Families program would be allocated $600 million to provide formula grants to the states to assist them in implementing coordinated systems of comprehensive programs and making early intervention services available to children with disabilities aged birth through 2. California has received a somewhat larger share of Infants and Families IDEA funding, approximately 12 percent.

     The Vocational Rehabilitation (VR) State Grants program would receive $500 million to support VR services through formula grants to States.

     The Department of Education would receive $200 million through the Independent Living Program for three separate programs: Independent Living State Grants, Centers for Independent Living, and the Services for Older Individuals Who Are Blind program.

     $15.636 billion would be appropriated for new Pell Grants, and an additional and mandatory $1.474 billion would be appropriated to address the mandatory Pell Grant shortfall for the 2009-2010 award year. The Student Aid Commission, which administers a number of Federal student aid programs and policies, including the Pell Grant program, would receive $50 million.

     $490 million would be provided for College Work-Study.

     The Teacher Quality State Grants program would be allocated $100 million.

     $250 million would be allocated to the Department of Education to support efforts to expand Statewide Data Systems.

     $14 billion would be allocated for school modernization, renovation and repair. $6 billion would be allocated to institutions of higher education for modernization, renovation and repair.      The amount of money students and their families can borrow through the Federal Stafford Loan Program would be increased by $2,000. Additionally, the Special Allowance Payment, which, under current law, is indexed to the Commercial Paper rate, would instead be indexed to the London Interbank Offered Rate for one quarter to provide stability in the student loan system.

     AmeriCorps programs would receive $200 million.

Transportation, Housing and Urban Development

     Department of Transportation

     Although the bill provides deadlines for using or losing the grants awarded, different deadlines are given for different transportation programs. For information on deadlines for specific programs, go to: http://transportation.house.gov/Media/File/Full%20Committee/20090122/SSM.pdf .

     Federal Highway Administration – Highway Infrastructure Investment will receive $30 billion.. Funds are to be distributed by formula, with a portion of the funds within each State being suballocated by population areas. Set asides are also provided for: Indian reservation roads; park roads and parkways; on-the-training programs focused on minorities, women, and the socially and economically disadvantaged; a bonding assistance program for minority and disadvantaged businesses; and environmentally friendly transportation enhancements.

     Within the $30 billion provided, the following suballocations are made:

     – Federal Aid Highway Formula – $29.35 billion

     – National Park Roads – $250 million

     – Indian Reservation Roads – $300 million

     – On the job training – $20 million

     – DBE bonding assistance – $20 million

     – Administrative funding – $60 million

     Capital Assistance Intercity Passenger Rail Service – $300 million will go to the Capital Assistance to States – Intercity Passenger Rail Service.

     Amtrak Capital Grants – $800 million is provided.

     Federal Transit Administration – Transit Capital Assistance funding is $6 billion.

     Fixed Guideway Infrastructure Investment – $2 billion

     Capital Investment Grants/New Starts – $1 billion

     In a House Transportation and Infrastructure memo on the transportation section of the stimulus, the Committee sets out a number of examples of “shovel-ready” projects that could be funded under the bill. The following California projects are mentioned as examples

     Passenger rail:

     – California Capital Corridor Joint Power Authority has $10 million in projects in the Capital Corridor between San Jose, Sacramento, and beyond.

     – CALTrans has more than $342 million in inner city passenger rail projects that can be obligated within 90 days, $258 million that can be obligated within 90 to 120 days, and $88 million within 120 and 180 days.

     Department of Housing and Urban Development

     Public and Indian Housing – The Public Housing Capital Fund will receive $5 billion

     Elderly, Disabled, and Section 8 Assisted Housing Energy Retrofit – $2.5 billion

     Community Development Block Grants – $1 billion

     Neighborhood Stabilization Program – $4.19 billion

     Home Investment Partnerships Program – The HOME Program will receive $1.5 billion.

     Self-help and Assisted Homeownership Opportunity Program – The SHOP Program will get $10 million

     Emergency Shelter Grants – $1.5 billion

     State Fiscal Stabilization Fund – $79 billion

Military Construction

     Department of Defense Base Closure Account 1990 will receive $300 million in funding for cleanup activities at closed installations dating back to the 1988 BRAC round.

International Commissions

International Boundary and Water Commission, United States and Mexico – Repair and rehabilitation projects of the water quantity program will receive $224 million.

State Fiscal Stabilization Fund

     The bill provides $79 billion for a State Fiscal Stabilization Fund in order to provide fiscal relief to the States to prevent tax increases and cutbacks in critical education and other high priority services over the next two years.

     Of the funds provided each year, one-half of 1 percent is reserved for the outlying areas; $12.5 million is reserved for the Secretary of Education for administration and oversight, including program evaluation, and $7.5 billion is reserved for State Incentive Grants. The remaining funds ($64 billion) are to be allocated to the States, of which 61 percent is to be allocated based on school-aged population and 39 percent is allocated based on total population.

     California houses 12.6% of the nation’s school-aged population and 12.1% of the total population. As such, the state’s share of these funds would be 12.4% or approximately $7.9 billion.

     The provisions controlling use of the fund include that the states shall use at least 61 percent of the funds to support elementary, secondary, and higher education. These funds must first be used by States to restore State aid to school districts under the primary State K-12 education funding formula and to institutions of higher education to FY 2008 levels, to the extent feasible given available State Stabilization Funds. Any remaining funds shall be allocated to school districts based on the formula under title I of the Elementary and Secondary Education Act. For each fiscal year, the Governor may use up to 39 percent of the funds for public safety and other government services, which may include assistance for elementary and secondary education and public institutions of higher education.

     The bill also authorizes up to $325 million each year for an Innovation Fund to support

awards by the Secretary of Education to recognize States, local educational agencies, or schools

that have made significant gains in closing achievement gaps.

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