[House Report 108-119]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    108-119

======================================================================



 
     INCREASING THE WAIVER REQUIREMENT FOR CERTAIN LOCAL MATCHING 
 REQUIREMENTS FOR GRANTS PROVIDED TO AMERICAN SAMOA, GUAM, THE VIRGIN 
 ISLANDS, OR THE COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS, AND FOR 
                             OTHER PURPOSES

                                _______
                                

  May 20, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Pombo, from the Committee on Resources, submitted the following

                              R E P O R T

                        [To accompany H.R. 1189]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 1189) to increase the waiver requirement for certain 
local matching requirements for grants provided to American 
Samoa, Guam, the Virgin Islands, or the Commonwealth of the 
Northern Mariana Islands, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                          Purpose of the Bill

    The purpose of H.R. 1189 is to increase the waiver for 
certain local matching requirements for grants provided to 
American Samoa, Guam, the Virgin Islands, and the Commonwealth 
of the Northern Mariana Islands, and for other purposes.

                  Background and Need for Legislation

    Federal law currently allows federal departments or 
agencies to waive the first $200,000 matching requirement for 
grants to the U.S. Territories of American Samoa, Guam, the 
Virgin Islands, and the Commonwealth of the Northern Mariana 
Islands (CNMI). The waiver of a matching requirement was first 
enacted in 1980 (Public Law 96-205) because accessing federal 
grants was difficult for territorial governments. At the time, 
the waiver was set at $100,000 and was extended only to 
American Samoa and the CNMI. Later amendments in 1983 and 1984 
to the underlying law increased the waived amount to $200,000 
(Public Law 98-213, Sec. 6) and added Guam and the Virgin 
Islands (Public Law 98-454, title VI, Sec. 601(b)).
    While territorial economies have improved over the last 
several years, each government continues to be challenged with 
rising unemployment, decreased government revenues, and limited 
new capital for diversification. H.R. 1189 will help broaden 
U.S. territories' access to federal grants by raising to 
$500,000 the floor for requiring matching funds from 
territorial governments. Specifically, for a grant requiring 
matching funds of $500,000 or less, the legislation waives the 
entire amount. For a grant requiring matching funds of more 
than $500,000, the legislation waives the first $500,000 of the 
matching requirement.
    H.R. 1189 also seeks to end the inconsistent manner in 
which current law is applied by clarifying that the matching 
waiver applies to all federal agencies and departments making 
grants to the U.S. Territories, not just the Department of the 
Interior. The Committee recognizes the authority of any federal 
agency or department to consolidate any or all grants to 
American Samoa, Guam, the Virgin Islands, or the CNMI (48 
U.S.C. Sec. 1469(a)). However, the Committee believes that the 
exercise of this authority by any federal agency or department 
shall not be employed in order to reduce the number of grants 
that would otherwise be subject to the matching waiver 
requirement increased by this legislation.
    Finally, the legislation directs the Secretary of the 
Interior to complete and submit to the House Committee on 
Resources and the Senate Committee on Energy and Natural 
Resources the results of a study of the implementation of the 
changes to the matching requirement made through the 
legislation.

                            Committee Action

    H.R. 1189, which was introduced on March 11, 2003 by 
Delegate Eni Faleomavaega (D-AS), is similar to legislation 
introduced by Delegate Robert Underwood (D-GU) that was 
reported out of the Committee on Resources during the 107th 
Congress. H.R. 1189 was referred to the Committee on Resources. 
On May 7, 2003, the Full Resources Committee met to consider 
the bill. The bill was ordered favorably reported to the House, 
without amendment, by voice vote.

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   Constitutional Authority Statement

    Article IV, section 3 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. The Committee on Resources 
believes that enactment of this bill will not have a 
significant effect on the federal budget.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, credit 
authority, or an increase or decrease in revenues or tax 
expenditures. According to the Congressional Budget Office, 
enacting this bill will increase direct spending by $2 million 
annually.
    3. General Performance Goals and Objectives. This bill does 
not authorize funding and therefore, clause 3(c)(4) of rule 
XIII of the Rules of the House of Representatives does not 
apply.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for this bill from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 14, 2002.
Hon. Richard W. Pombo,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1189, a bill to 
increase the waiver requirement for certain local matching 
requirements for grants provided to American Samoa, Guam, the 
Virgin Islands, or the Commonwealth of the Northern Mariana 
Islands, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                          Barry B. Anderson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 1189--A bill to increase the waiver requirement for certain local 
        matching requirements for grants provided to American Samoa, 
        Guam, the Virgin Islands, or the Commonwealth of the Northern 
        Mariana Islands, and for other purposes

    Under current law, federal agencies are allowed to waive 
the requirement for the first $200,000 of local matching funds 
for federal grants to the territories of American Samoa, Guam, 
the Virgin Islands, and the Commonwealth of the Northern 
Mariana Islands. H.R. 1189 would increase that waiver from 
$200,000 to $500,000.
    CBO estimates that enacting H.R. 1189 would increase direct 
spending by $2 million annually. The territories would be 
allowed to spend less of their own funds for several mandatory 
programs including the Temporary Assistance for Needy Families, 
Medicaid, Food Stamp, and Child Support Enforcement (CSE) 
programs. Federal contributions to the territories are capped 
for most programs, so federal spending would generally remain 
unchanged. However, funding for the territories is not capped 
for administrative costs in the Food Stamp and CSE programs. We 
estimate that federal spending would increase by about $1 
million a year for each of the programs. Guam and the Virgin 
Islands participate in those programs.
    Under H.R. 1189, each territory's contribution would be 
reduced by $300,000 in each of the Food Stamps and CSE 
programs, and the federal payment to the territory would be 
increased by that amount. In addition, CBO expects that the 
territories would use some of the waived amounts to draw down 
additional federal matching funds in those programs. In total, 
assuming an enactment date of October 1, 2003, CBO estimates 
that federal spending for those progams would increase by about 
$2 million annually, beginning in fiscal year 2004.
    CBO estimates that increasing the local matching fund 
waiver would not have a significant effect on the value of 
grants awarded that are subject to appropriation.
    H.R. 1189 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments. 
Enacting this legislation would benefit the affected 
territories.
    The CBO staff contacts for this estimate are Matthew 
Pickford, Kathleen FitzGerald, and Sheila Dacey. This estimate 
was approved by Peter H. Fontaine, Deputy Assistant Director 
for Budget Analysis.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                        ACT OF OCTOBER 15, 1977


                          (Public Law 95-134)

 AN ACT To authorize certain appropriations for the territories of the 
 United States, to amend certain Acts relating thereto, and for other 
purposes.

           *       *       *       *       *       *       *


                                TITLE V

  Sec. 501. In order to minimize the burden caused by existing 
application and reporting procedures for certain grant-in-aid 
programs available to the Virgin Islands, Guam, American Samoa, 
the Trust Territory of the Pacific Islands, and the Government 
of the Northern Mariana Islands (hereafter referred to as 
``Insular Areas'') it is hereby declared to be the policy of 
the Congress, notwithstanding any provision of law to the 
contrary, that:
  (a) * * *

           *       *       *       *       *       *       *

  (d) Each department or agency making grant-in-aid shall, by 
regulations published in the Federal Register, provide the 
method by which any Insular Area may submit (i) a single 
application for a consolidated grant for any fiscal year 
period, but not more than one such application for a 
consolidated grant shall be required by any department or 
agency unless notice of such requirement is transmitted to the 
appropriate committees of the United States Congress together 
with a complete explanation of the necessity for requiring such 
additional applications and (ii) a single report to such 
department or agency with respect to each such consolidated 
grant: Provided, That nothing in this paragraph shall preclude 
such department or agency from providing adequate procedures 
for accounting, auditing, evaluating, and reviewing any 
programs or activities receiving benefits from any consolidated 
grant. The administering authority of any department or agency, 
in its discretion, may (i) waive any requirement for matching 
funds otherwise required [by law] to be provided by the Insular 
Area involved and (ii) waive the requirement that any Insular 
Area submit an application or report in writing with respect to 
any consolidated grant.
  (e) Notwithstanding any other provision of law, in the case 
of American Samoa, Guam, the Virgin Islands, and the Northern 
Mariana Islands, each department or agency of the United States 
shall waive any requirement for local matching funds (including 
in-kind contributions) that the insular area would otherwise be 
required to provide for any grant as follows:
          (1) For a grant requiring matching funds (including 
        in-kind contributions) of $500,000 or less, the entire 
        matching requirement shall be waived.
          (2) For a grant requiring matching funds (including 
        in-kind contributions) of more than $500,000, $500,000 
        of the matching requirement shall be waived.

           *       *       *       *       *       *       *


                         ACT OF MARCH 12, 1980

                          (Public Law 96-205)

  AN ACT To authorize appropriations for certain insular areas of the 
United States, and for other purposes.

           *       *       *       *       *       *       *


                        TITLE VI--MISCELLANEOUS

  Sec. 601. Title V of the Act of October 15, 1977, entitled 
``An Act to authorize certain appropriations for the 
territories of the United States, to amend certain Acts 
relating thereto, and for other purposes'' (91 Stat. 1159) 
shall be applied with respect to the Department of the Interior 
by substituting ``shall'' for ``may'' in the last sentence of 
subsection (d)[, and adding the following sentence at the end 
of subsection (d): ``Notwithstanding any other provision of 
law, in the case of American Samoa and the Nothern Mariana 
Islands any department or agency shall waive any requirement 
for local matching funds under $200,000 (including in-kind 
contributions) required by law to be provided by American Samoa 
or the Northern Mariana Islands.''].

           *       *       *       *       *       *       *


                                
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