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California Capitol Hill Bulletin

Volume 5, Bulletin 10 — March 19, 1998

 Disaster Relief Supplemental Moving In Senate
 Bay-Delta Delegation Letter Circulating
 One More Day to Sign  R&D Dear Colleague Letter
 CALFED Releases Three Bay-Delta Restoration Alternatives
 Senate Judiciary Holds Hearing On Privacy and Encryption Usage
 Semiconductor Industry Releases Report Showing Its Major Contribution to U.S. Economy
 Cox Unveils Revised Internet Tax Moratorium Bill With Approval of Governors and Mayors
 “House that Congress Built” — Half of California Delegation To Participate
 2 Brownfields Showcase Communities Awarded to CA
 Renewal of Nation’s Child Nutrition Programs
 Renewal of Higher Education Act Advances in House
 Court Oks Shipment of Nuclear Fuel rods Through Concord
 State Auditor Report on Child Support Computer Failure
 Four California Counties are Top Population Gainers
 New California Unemployment Figures Released

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 a computer server donation from Sun Microsystems.

    The Senate Appropriations Committee on Tuesday approved two separate supplemental appropriations bills by a 26-2 vote.  The House and Senate leadership had previously decided to split the supplemental into two bills in an attempt to move the disaster aid portion quickly without extraneous and controversial issues that may slow down the other bill.
    The disaster relief supplemental contains a total of about $2.4 billion in additional funding.  Disaster relief to states, such as California and Florida, hard hit by El Niño’s storms, would receive $610 million, that includes $259 million for highway repairs, $109 million for national parks cleanup, and about $117 million to growers and ranchers for damages to crops and livestock.  The balance of the funding in the bill would go for Bosnia peacekeeping efforts and activities in the Persian Gulf.  Although exact figures on how much of the new funding California would receive are not yet available, the State has already identified $296 million in transportation infrastructure damage because of El Niño.  The bill does include $69 million for assistance to military bases throughout the state that have suffered damages.
    The second supplemental, which will probably be considered after the first, gives an additional $17.9 billion to the International Monetary Fund to allow it to continue to provide assistance to those Asian countries experiencing economic crises.
    The House Appropriations Committee is expected to take up its bill next Tuesday.  In addition to splitting the package into two bills, the House may include about $921 million in the second bill to pay for United Nations dues that are in arrears.  However, that money may be tied to prohibitions on the use of U.N. money for groups that perform or advocate abortions, a provision which may draw a presidential veto.  The Senate Appropriations Committee did not include any funding for arrearages to the U.N.

    A California Congressional Delegation letter to Rep. Joseph McDade (PA), Chairman of the House Appropriations Subcommittee on Energy and Water Development, is being circulated by Reps. George Radanovich (Mariposa), Cal Dooley (Visalia), Jerry Lewis (Redlands), and Lucille Roybal-Allard (Los Angeles).  The letter thanks Chairman McDade for his support of FY98 funding for the Bay-Delta restoration project and urges him to include the full $143 million funding level in the FY99 appropriations.  The President’s budget also requests $143 million, which represents one-third of the authorization approved by Congress to be funded over a three year period.
    Last year, the House appropriations bill funded only $120 million for the project, and the Senate bill only $50 million.  The appropriations conference agreed to split the difference and fund the Bay-Delta at $85 million for FY98.  A similar letter last year garnered the signatures of 48 delegation members.
    The San Francisco Bay/Sacramento-San Joaquin Delta Estuary (the “Bay-Delta”) is a 700 square-mile region of waterways, sloughs, and islands where the San Francisco Bay meets the states two largest rivers.  The Bay-Delta supplies some or all of the water needs for two-thirds of the state’s homes and businesses and over four million acres of agricultural land.  It is also the home of millions of birds and over 53 species of fish.  In its 1994 report California Water Plan Update, the California Department of Water Resources warned that California’s water users (domestic, industrial, agricultural, and environmental) face growing water shortages beginning in the year 2000, as well as increased deterioration in the Bay-Delta’s ecological health, because of reduced supply and increased demand.  The CALFED consortium of ten federal and state agencies was created in 1994 to address the Bay-Delta problems in a collaborative way with extensive public and stakeholder participation.
    Members wishing to sign the letter should contact Tricia Geringer in Rep. Radanovich’s office at x54540 or Mark Kramer in Rep. Dooley’s office at x53341.  The deadline for signing the letter is Wednesday, March 25.

    Forty-one members of the California congressional delegation  (21 Republicans and 20 Democrats) have now signed the Dear Colleague letter being circulated by Reps. Wally Herger (Marysville) and Bob Matsui (Sacramento) on the R&D Tax Credit.   The letter addressed to Ways and Means Chair Bill Archer (TX) and Ranking Member Charles Rangel (NY) supports the permanent extension of the credit (formally known as the Research and Experimentation Tax Credit), which is set to expire this June 30.
    The credit is extremely important to California’s high technology and biotechnology industries which must invest a significant percentage of their revenues in R&D in order to stay globally competitive.  The deadline for signing the letter is Friday, March 20.  Members wishing to sign should contact Dave Olander in Rep.Herger’s office (x53076), or Francis Grab in Rep. Matsui’s office (x57163).

    As expected, on Monday CALFED, a federal-state partnership established to develop a plan to restore the San Francisco Bay-Sacramento/San Joaquin Delta, released three alternative plans to “fix” the estuary.  Each of the alternatives contained in the draft report, called the Programmatic Environmental Impact Statement and Report (EIS/EIR), comprehensively addresses the four main problems with the Bay-Delta system:  ecosystem degradation, water supply reliability, water quality, and levee system integrity.  According to CALFED, the major difference among the three plans is the manner in which water within the Bay-Delta system would be moved and stored.
    The draft and its 11 appendices consist of over 2,400 pages of technical information, studies, analyses, and related information.  The public will have until June 1 to comment on the EIS/EIR and CALFED hopes to select the “preferred alternative” by the end of the summer, although that time frame may prove to be too optimistic.  As the agricultural, urban, and environmental stakeholders in the CALFED process begin to pore over the details in the report, everyone is applauding the hard work that CALFED has put into the process and urging continued cooperation among the various parties.  Nevertheless, the consensus currently seems to be that the three alternatives are works in progress that will require more work before any preferred alternative can be agreed upon.
    CALFED will begin gathering public comment with an orientation session on April 3 in Sacramento, and has a dozen public hearings scheduled throughout the state in late April and May.
    The entire report, as well as an executive summary and other documents, can be accessed through CALFED’s website at:  Hard copies can be ordered by calling 800-900-3587.

    The Senate Judiciary Committee held a hearing on Tuesday entitled “Privacy in the Digital Age:  Encryption and Mandatory Access.”  The hearing focused on the privacy interests affected by controlling the use of encryption technology in electronic communications and transactions.
The Committee heard from Robert Litt of the Department of Justice who argued that the Administration, including its law enforcement agencies, wanted a balanced approach to controlling encryption use to enhance law enforcement activities without hampering the ability of law-abiding citizens to use encryption to protect the privacy of their electronic activities.  Mr. Litt stated that, despite last year’s action to the contrary by the House Intelligence Committee, the Administration does not support controlling the domestic use of encryption technology.  He also testified that the Administration is not wedded to the idea of mandating a key recovery system in encryption products and software, but would rather work with private industry to reach a consensus solution.
    The Committee also heard from a panel of constitutional experts on the privacy interests affected by government control of encryption technology.  Kathleen Sullivan, Professor of Law at Stanford University Law School, testified that a mandatory government-controlled key recovery system turns the First Amendment on its head.  In effect it inverts the constitutional precept that all  speech is presumed free until there is probable cause to the contrary to the notion that all speech is presumed relevant to government interests until proven otherwise.  Moreover, Prof. Sullivan stated that the government’s attempt to reach a consensus solution with the industry may not satisfy the First Amendment, because “cooperative solutions are not necessarily constitutional” solutions.
    Testimony from the witnesses may be accessed through the Committee’s website at:

    The Semiconductor Industry Association unveiled a major report this week during its Washington convention detailing the significant contribution that the semiconductor industry makes to the U.S. economy.  The report, America’s Semiconductor Industry:  Turbocharging the U. S. Economy, was prepared by Nathan Associates Inc.  It finds that since 1987, the semiconductor industry has soared from the 17th largest industry in terms of value added to the economy to become the largest manufacturing industry in the country.  In 1996, the report found that the industry created $41.6 billion of value for the U.S. economy, far outstripping the second-place motor vehicles parts and accessories industry’s $34.7 million share.
    Industry employment, according to the report, reached 257,000 people in 1996, and has a growth rate of 4.3 percent per year since 1991, which is 8.6 times faster than all other manufacturing employment.  The industry must also invest significant sums on new plants and equipment each year to deal with the rapid growth in technology.  With spending in these areas reaching $9.5 billion in 1996, new capital spending by the industry almost equaled that of all other high-tech manufacturers combined.  Moreover, R&D expenditures accounted for five percent of the growth of all industry-funded R&D since 1987.  Although may industries are either capital intensive ore research intensive, the report concluded that none are as research and capital intensive as the semiconductor industry.
    For a copy of the report, contact the Semiconductor Industry Association at 408-436-6600.

    Rep. Chris Cox (Newport Beach) will introduce a modified version of his Internet Tax Freedom Act that has garnered the approval of the National Governors’ Association and the National League of Cities.  The bill imposes a three-year moratorium on new state and local taxes on Internet access charges and online services.  The previous version, H.R. 1054, would have imposed a six-year moratorium.  In addition, the new bill grandfathers in state and local taxes on access and services that were in place as of March 1, 1998.
    The new version will also establish a Commission on Electronic Commerce composed of state, local, industry, and taxpayer advocates who will make recommendations to Congress two years after enactment on whether the Internet ought to be taxed and, if so, how taxes can be applied without subjecting Internet and electronic commerce to special, discriminatory, or multiple taxation.  The bill also calls on the Administration to urge foreign governments to keep the Internet free of taxes and tariffs.
     H.R. 1054 had been favorably reported by the House Judiciary Committee’s Administrative Law Subcommittee last year, but ran into strong opposition from the nation’s governors and mayors as impinging on the ability of state and local governments to tax Internet sales transactions.

    Last June, Rep. Jerry Lewis (Redlands), House Speaker Newt Gingrich (GA), Rep. Louis Stokes (OH), Secretary of Housing and Urban Development Andrew Cuomo, and more than 30 members of Congress met in Southeast Washington, D.C. to start construction on two single-family homes for local families.  Rep. Lewis, other members, the families, and many volunteers continued building the homes throughout the summer until they were completed and dedicated last September.
    This year, that successful effort is being expanded nationwide.  On February 21, 1998, Rep. Lewis, working in partnership with the High Desert Habitat for Humanity affiliate in his district, participated in the first groundbreaking of the 1998 House that Congress Built effort to help build decent, affordable homes for low-income families across the United States.
    To kick off National Homeownership Week this June, 241 Members of Congress from every region of the country will participate in home building efforts in their own congressional districts in participation with Habitat for Humanity on the weekend of June 6-7.
    So far, 25 California Representatives plan to build homes in their districts:  Reps. Jerry Lewis (Redlands), Frank Riggs (Windsor), Wally Herger (Marysville), Vic Fazio (West Sacramento), Lynn Woolsey (Petaluma), George Miller (Martinez), Pete Stark (Fremont), Anna Eshoo (Atherton), Sam Farr (Carmel), Gary Condit (Ceres), Elton Gallegly (Simi Valley), Brad Sherman (Sherman Oaks), Buck McKeon (Santa Clarita), Howard Berman (N. Hollywood), James Rogan (Glendale), David Dreier (San Dimas), Esteban Torres (West Covina), Juanita Millender-McDonald (Carson), Steve Horn (Long Beach), Jay Kim (Diamond Bar), George Brown (San Bernardino), Ken Calvert (Corona), Chris Cox (Newport Beach), Brian Bilbray (San Diego), and Bob Filner (San Diego).
 Please contact Dave LesStrang at 225-5861 in Congressman Lewis’ office for more information.

    Vice President Gore announced on Tuesday that East Palo Alto and Los Angeles would receive a share of $28 million in federal money and technical assistance from 15 federal agencies to clean up brownfields in those areas.  Fourteen other communities throughout the nation will also receive assistance through this federal clean-up effort.  The Administration estimates that there are approximately 450,000 brownfield sites nationwide.
    According to the U.S. Environmental Protection Agency’s (EPA) definition,  brownfields are abandoned, idled or underused industrial and commercial properties where expansion or redevelopment is complicated by real or perceived environmental contamination from previous industrial use.  The Administration says the designation of Brownfield Showcase Communities is meant to demonstrate the benefits of cooperation and collaboration among multiple federal agencies and local resources to clean-up and revitalize the land.
    Nine California sites (or about 7.5% of all selected sites) — East Palo Alto, Emeryville, Oakland, Pomona, Richmond, Sacramento, San Diego, San Francisco, and Stockton — were previously selected by EPA as one of either the 64 national or 57 regional brownfields pilot programs under the Administration’s broader two-year, $300 million Brownfields National Partnership.  For 1998, Congress appropriated $25 million for the Brownfields Redevelopment Program, and the President has requested $50 million in his FY99 budget proposal.  The money is used for competitive grants and as leverage for loan guarantees, in addition to tax incentives available to brownfields projects within designated enterprise and empowerment zones.
    For more information about the Administration’s brownfields initiative, the East Palo Alto or Los Angeles community project proposals, or any of the brownfields programs, see the EPA’s web site at http//

    Recently, the Senate and House convened hearings to discuss issues surrounding the renewal of the nation’s child nutrition laws.  Some of the programs governed by these laws and administered by the U.S. Department of Agriculture (USDA) — National School Lunch Program (NSLP), School Breakfast Program (SBP), Summer Food Service (SFS), Child and Adult Care Food Program (CACFP), Nutrition Education and Training Program (NET), and WIC – will expire at the end of the 1998 fiscal year.  Earlier this year, the Clinton Administration submitted a child nutrition reauthorization proposal.
    On Wednesday, the Senate and House Committees discussed the Special Supplemental Nutrition Program for Women, Infants and Children, commonly referred to as WIC. Demonstrated to be one of the most effective government programs, WIC serves 7.5 million women and children.  A GAO study found that for every dollar invested in prenatal care, WIC saves the government $3.50 on other health care costs.  To participate in the WIC program, participants must be either a pregnant or postpartum woman or a child under 18, that has one or more documented nutritional risks and an income at or below 185% of the poverty level.  Of the $3.7 billion spent in FY97, roughly 25% of each state grant went for Nutrition Services and Administration (NSA) — 9% on program administration and 16% on direct care activities — and the remaining 75% went directly for food benefits.  California received a $631 million state grant for FY96, or 16.6% of the funds.
    Undersecretary for Food, Nutrition and Consumer Services at USDA Shirley Watkins — testifying before both the Senate Agriculture, Nutrition, and Forestry Committee and the House Subcommittee on Early Childhood, Youth and Families of the Education and Workforce Committee — outlined the Administration’s proposed changes.  The Administration has requested just over $4 billion for WIC in FY99, a $300 million increase over last year.  Also on both panels were Robert Greenstein, Executive Director on Budget and Policy Priorities, and Dennis Hemmings, President of the National Association of WIC Directors.
    Last week, both the Senate and House also examined the School Lunch, School Breakfast, and Summer Food Service programs.  The General Accounting Office testified about its recent report on cuts made last year to the Summer Food Service Program.  Last year lawmakers reduced subsidies for food vendors under the 1996 Welfare Reform Act, but the GAO report said only small reductions in provision of meals were made.  The GAO report also said that while overall participation in the program actually increased, several states said they expected more significant drops in 1998 as sponsors evaluate the 1997 financial situation and the 1996 welfare reform law continues to be implemented.  California had about 9.3 percent of the participants served by the National School Lunch Program in FY96.
    Complete witness lists and testimony are available on the Senate and House Committee’s web sites at and  Copies of the GAO reports Effects of Changes Made to the Summer Food Service Program and States Had a Variety of Reasons for Not Spending Funds are available at

    This week, the House Committee on Education and the Workforce approved H.R. 6, a five-year renewal of the Higher Education Act of 1965, by a 38-3 vote.  Last week, the Subcommittee on Postsecondary Education, Training, and Lifelong Learning referred a draft of the bill to the full committee, but without consensus on key components resolving the proposed drop in student loan interest rates and teacher education and training issues.  See Bulletin, Vol. 5, No. 9 — 3/12/98.  The Higher Education Act is set to expire in September, 1998.
    Earlier this week, Committee Chair William Goodling (PA) and Subcommittee Chair Buck McKeon (Santa Clarita) put forth a compromise proposal on the interest rate charged by private lenders for student loans.  Private lenders, who provide about 70% of the student loans, had said that if a scheduled change in the student loan interest rate made by a 1993 law took effect, causing the rates to fall, the market for student loans would become unprofitable for private lenders.  On Thursday, a similar plan, with bipartisan support, to reduce the rate from the current 8.23 percent rate to 7.43 percent was approved by the full committee.  Under the compromise, the federal government will pay private lenders sufficient interest to cover a 7.93 percent interest rate, about $300 million a year, to encourage private lenders to continue to participate in the federally-backed loan program.
    The Education and Workforce Committee also approved changes to the Act’s teacher training programs, consolidating the 16 teacher preparation programs under current law into single competitive federal block grants to governors, which could be used to improve teacher certification, subject knowledge, and other preparation activities.  Over five years, the cost of the bill is estimated to be between $1.2 billion and $3.8 billion.  The bill is expected to go to the House Floor next month.
    Check the website of the House Committee for Education and the Workforce for more information about H.R. 6, the student loan interest rate issue, and other provisions of the bill at

    On Wednesday, a federal judge ruled that the U.S. Department of Energy had followed proper procedures in designating the Concord Naval Weapons Station for receipt of its planned shipments of spent nuclear fuels rods.  The U.S. Department of Energy had selected the site as the port of entry for the ocean-shipped spent nuclear fuel rods enroute to the Idaho National Engineering and Environmental Laboratory.
    The City of Concord and County of Contra Costa sued the Department of Energy claiming that the selection of the Concord NWS violated a federal law applied to nuclear shipments through South Carolina.  The federal law mandates selection of a port for nuclear fuel shipments that is in the least-populated area, closest to the final destination, and has experience handling spent nuclear fuel.  The U.S. District Court judge found that the Energy Department had followed those criteria in the selection of Concord.
    Reps. Herger (Marysville), Miller (Martinez), Tauscher (Pleasanton), and others had raised concerns about the safety of shipping procedures and the route of the Union Pacific through the Feather Canyon.  In late January, the Energy Department publicly outlined the safety measures the agency would take when it transports the shipments scheduled to be received beginning early this summer.
    The return of the spent nuclear fuel rods are part of a long-term program begun in the 1950s when the federal government sent nuclear fuel roads overseas as part of its Atoms for Peace program.  To keep the uranium in the spent fuel rods from being used for non-research purposes, the spent rods are being returned to the United States for storage.  The City of Concord and County of Contra Costa are scheduled to discuss an appeal to the decisions next week.

    The California State Auditor released a report this week that blames all parties for the state’s failure to meet the federal deadline to have a statewide automated child support collection system.  The original contract for the project was awarded to Lockheed Martin Information Management Systems Corp. in 1992, but the state canceled the $345 million contract last November after protracted systems problems and disagreement with the state.  One of the major challenges of creating a statewide system is to integrate the 58 systems used by California counties.  The state is reported to be working on a new project proposal for review by the federal government next month.
    Under current law, California could face penalties of up to $3.8 billion dollars this year if it fails to implement a statewide child support collection system.  Earlier this month, the House passed, on a 414-1 vote, a bill (H.R. 3130) that would reduce the federal fines substantially.  Under the legislation, California would be penalized $11 million this year, with fines escalating to $54 million in the fourth year of non-compliance.  Senator Feinstein has also introduced similar legislation that would also give states greater flexibility in the design of their systems and further reduce scheduled fines.  See Bulletin, Vol. 5, Nos. 7 (2/26/98) & 8 (3/5/98).
    A copy of the State Auditor’s report is available at

    Between the summers of 1996 and 1997, four California counties out of the 3,142 counties nationwide, were among the top ten gainers of new residents according to figures released this week by the Census Bureau.  While no California county was among the top ten counties in terms of rate of population growth, California as a state is growing faster, at 1.3% a year, than the nation as a whole at 0.9% in 1996-97.  The Census Bureau report also found that people are still moving out of metropolitan areas into neighboring counties, resulting in a “donut pattern of growth” around urban areas.  Still, metropolitan counties are growing 2.5 times the rate of non-metropolitan counties in more remote locations.  Not surprisingly, the Census Bureau found that the fastest-growing one-fifth of counties were primarily in the Southern and Western portion of the United States while the Northeast and Midwest had the most slowest-growing and declining one-fifth of counties.
    Los Angeles (net gain: 61,623), Orange (+54,733), San Diego (+45,447), Riverside (+33,113) counties joined three counties from Texas (Harris, Dallas, and Collin), one each from Florida (Broward) and Nevada (Clark), and the nation’s largest population gaining county from Arizona (Maricopa County, which welcomed 82,789 new residents).
    The Census Bureau estimates California’s total population to be 32,268,301.  According to the Census Bureau’s estimates, California’s recent (1990-1997) population growth is attributed primarily to a strong birthrate and international migration.  Net domestic migration has recently edged into positive territory as well.  State demographers said that people are probably moving into Southern California to follow jobs in the entertainment and high technology industries.
    If you would like more information, visit the Census Bureau’s web site at

    California’s unemployment rate returned to pre-recession levels last month, falling to 5.8% in February from 6.0% in January, according to the state’s Economic Development Department.  The last time this level was seen was in August 1990.  The total number of persons employed rose to nearly 15.2 million — 43,000 over the previous month and 417,000 from the level of one year prior — and the number of unemployed persons declined to 931,000 the lowest level since September 1990.  Sectors experiencing strong employment gains included retail and wholesale trade, services, and manufacturing.  Construction gained slightly over January’s level but was up sharply from one year before.
    County-level unemployment data (which are not adjusted for seasonal variations and thus may seem higher than the above figures for February) showed strength in previously recession-bound Southern California, including Los Angeles and Ventura (both 6.0%), San Bernardino (5.8%), Riverside (6.6%), and especially San Diego (3.7%) and Orange (3.0%) counties.
 Bay Area counties showed continued strength, including San Francisco (3.8%), San Mateo (2.5%), Santa Clara (2.9), Marin (2.6%), Alameda (4.1%), Contra Costa (4.1%), Solano (6.5%), Napa (5.3%), and Sonoma (4.2%) counties, although their neighbors just to the south were less fortunate in Santa Cruz (10.4%) and Monterey (17.7%) counties.
    Some of the worst unemployment rates remain in the Central Valley, except for those in the vicinity of the state capitol — Sacramento (5.7%), Placer (5.2%), El Dorado (6.1%) and Yolo (7.7%) counties.  Chronically high unemployment rates continue to persist in Fresno (16.0%), San Joaquin (12.6%), Merced (18.9%), Kern (13.3%), Kings (14.6%), Tulare (17.7.%), Madera (14.8%), Butte (9.9%), and Sutter (17.9%).  The highest rates in the state were in Imperial (23.0%) and Colusa (30.8%) counties.
    For more information visit the website:

CORRECTION:  Last week’s ISTEA article inadvertently missed recognizing Representative Bob Filner (San Diego) as one of three co-chairs of the California ISTEA Task Force, in addition to co-chairs Reps. Jay Kim (Diamond Bar) and Juanita Millender-McDonald (Carson).

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