[House Report 114-586]
[From the U.S. Government Publishing Office]


114th Congress }                                           {  Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                           {  114-586

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

 
 CLARIFYING CONGRESSIONAL INTENT IN PROVIDING FOR DC HOME RULE ACT OF 
                                  2016

                                _______
                                

  May 23, 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Chaffetz, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 5233]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 5233) to repeal the Local Budget 
Autonomy Amendment Act of 2012, to amend the District of 
Columbia Home Rule Act to clarify the respective roles of the 
District government and Congress in the local budget process of 
the District government, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Committee Statement and Views....................................     2
Section-by-Section...............................................     8
Explanation of Amendments........................................     8
Committee Consideration..........................................     8
Roll Call Votes..................................................     8
Application of Law to the Legislative Branch.....................    11
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    11
Statement of General Performance Goals and Objectives............    11
Duplication of Federal Programs..................................    11
Disclosure of Directed Rule Makings..............................    11
Federal Advisory Committee Act...................................    11
Unfunded Mandate Statement.......................................    11
Earmark Identification...........................................    12
Committee Estimate...............................................    12
Budget Authority and Congressional Budget Office Cost Estimate...    12
Changes in Existing Law Made by the Bill, as Reported............    13
Minority Views...................................................    19

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    H.R. 5233, the Clarifying Congressional Intent in Providing 
for DC Home Rule Act of 2016, repeals the Local Budget Autonomy 
Amendment Act of 2012 (D.C. Law 19-321). Additionally, the 
legislation clarifies that the Home Rule Act of 1973 should not 
be read as establishing a continuing appropriation for the 
District of Columbia and that District funds shall be 
appropriated annually on a federal fiscal year basis. H.R. 5233 
also clarifies that the District does not have the authority to 
enact changes to the appropriation and budgetary process of the 
District government. H.R. 5233 will ensure the District's 
budget process remains in compliance with the intent of 
Congress in passing the Home Rule Act of 1973.

                  BACKGROUND AND NEED FOR LEGISLATION

    The Local Budget Autonomy Act (LBAA) was passed in December 
2012 by the District of Columbia local government. The LBAA 
purports to provide the District with the authority to pass a 
budget for its local funds, without the need for a 
Congressional appropriation.\1\ Instead of an active 
appropriation by Congress, the LBAA would provide for only a 
passive review of the District's budget such that, if after 30-
days Congress does not pass a joint resolution declaring the 
budget proposed void, the funds would be considered 
appropriated.\2\ However, the proposed process is in direct 
contravention of the intent of the Home Rule Act, as passed by 
Congress in 1973, and the intent of the Founding Fathers in 
providing for the creation of the District of Columbia in 
Article 1, Section 8, Clause 17 of the U.S. Constitution.\3\ In 
addition, the LBAA contravenes the Antideficiency Act and the 
Budget and Accounting Act of 1921.\4\
---------------------------------------------------------------------------
    \1\The Local Budget Autonomy Act of 2012, D.C. Law 19-321 (2012).
    \2\Pub. L. No. 93-198 (1973).
    \3\U.S. Const. Art. 1, Sec. 8, cl. 17.
    \4\Letter from Susan A. Poling, General Counsel, GAO, to Ander 
Crenshaw, Chairman, H. Comm. on Appropriations (Jan. 30, 2014).
---------------------------------------------------------------------------
    As the result of a recent Superior Court of the District 
Columbia opinion on the LBAA, it is most expedient for Congress 
to remedy the unlawful actions taken by the District by 
explicitly repealing the LBAA. It is the view of this Committee 
that the LBAA is unlawful and null and void, regardless of any 
action by Congress. Further it is also this Committee's view 
that the language of the Home Rule Act is clear in expressly 
reserving the role and authority of Congress in the District's 
budget process. However, to provide greater immediate clarity, 
and avoid potential negative consequences for District 
Government employees,\5\ the Committee believes it is 
appropriate to exercise its legislative authority, through H.R. 
5233, so as to explicitly bring the District back in compliance 
with Congressional intent.
---------------------------------------------------------------------------
    \5\GAO, Principles of Federal Appropriations Law 3rd, (Aug. 6, 
2010), available at http://www.gao.gov/special.pubs/d06382sp.pdf.
---------------------------------------------------------------------------

Passage of the LBAA

    In December 2012, the Council of the District of Columbia 
passed the LBAA. The LBAA passed based on what has been 
characterized as a new understanding of the provisions of the 
Home Rule Act of 1973.\6\ In his testimony before the 
Committee's Subcommittee on Government Operations' May 12, 2016 
hearing on the LBAA, the Chairman of the Council, Phil 
Mendelson, stated that third party advocacy groups put forward 
the new interpretation, which would provide for budget 
autonomy.\7\ For the roughly forty years prior to the passage 
of the LBAA, the District made no attempt to alter its budget 
process absent an act of Congress. However, proponents of 
budget autonomy made numerous attempts to do so in Congress 
during that period.\8\ The efforts taken in Congress indicate 
that budget autonomy from Congress was a goal of the District, 
but one that had been understood as requiring Congressional 
intervention to achieve, and acknowledging that the Home Rule 
Act prohibits the District's unilateral actions.
---------------------------------------------------------------------------
    \6\D.C. Home Rule: Examining the Intent of Congress in the District 
of Columbia Home Rule Act of 1973: Before the Subcomm. On Gov't 
Operations of the H. Comm. on Oversight and Gov't Reform, 114 Cong. 
(May 12, 2016).
    \7\Id. (testimony of Phil Mendelson).
    \8\See e.g. Press Release by Del. Eleanor Holmes Norton, Norton 
Takes on Leadership Role in Economic Recovery in the 111th Cong. (Dec. 
29, 2008), available at https://norton.house.gov/media-center/press-
releases/norton-takes-on-leadership-role-in-economic-recovery-in-the-
111th.
---------------------------------------------------------------------------
    Following the Council's passage of the LBAA, then-Mayor 
Vincent Gray signed the LBAA into law.\9\ In 2013, the LBAA was 
placed on a referendum ballot to be voted on by District 
voters. In that vote, only 10 percent of the eligible voters in 
the District cast ballots.\10\ Of those that cast ballots, 83 
percent voted in favor of the LBAA.\11\ However, following this 
measure, Mayor Gray took the position that the LBAA was 
unlawful, null and void, and therefore could not be enforced by 
himself or the Chief Financial Officer (CFO) of the 
District.\12\
---------------------------------------------------------------------------
    \9\Memorandum from Brian T. Yeh to H. Comm. on Oversight and Gov't 
Reform (Apr. 18, 2016), (on file with Comm.).
    \10\ D.C. Home Rule: Examining the Intent of Congress in the 
District of Columbia Home Rule Act of 1973: Before the Subcomm. On 
Gov't Operations of the H. Comm. on Oversight and Gov't Reform, 114 
Cong. (May 12, 2016) (testimony of Irvin Nathan).
    \11\Memorandum from Brian T. Yeh to H. Comm. on Oversight and Gov't 
Reform (Apr. 18, 2016), (on file with Comm.).
    \12\Letter from Vincent Gray, Mayor, District of Columbia to Phil 
Mendelson, Chairman, Council of the District of Columbia (Apr. 11, 
2016).
---------------------------------------------------------------------------
    Mayor Gray's decision to reverse his previous support for 
the LBAA was the result of a legal opinion issued by then-
Attorney General Irvin Nathan. In that opinion, Mr. Nathan 
concluded that the LBAA was not lawful under the Home Rule 
Act.\13\ Mr. Nathan's legal opinion, an opinion that was held 
by Mr. Nathan's successor as well, stated that the LBAA would 
improperly interfere with Constitutional and statutory roles of 
Congress and the Federal Government in the budget process.\14\ 
His opinion also highlighted the potential criminal and 
administrative liability that District government employees 
could face in the event funds are expended under an LBAA budget 
without Congressional approval.\15\
---------------------------------------------------------------------------
    \13\ Id.
    \14\Id.
    \15\Id.
---------------------------------------------------------------------------
    The Attorney General's opinion echoed a legal opinion 
issued by the U.S. Government Accountability Office (GAO) that 
determined the LBAA was unlawful under the Home Rule Act and 
contradicted both the Antideficiency Act and the Budget and 
Accounting Act of 1921.\16\ GAO determined that the 
prohibitions included in the Home Rule Act, the legislative 
history of the Home Rule Act, and the Constitutional grant of 
plenary authority to Congress over the District all showed the 
LBAA to be unlawful.\17\ In its opinion, GAO, the agency in 
charge of investigating Antideficiency Act violations, also 
rejected several positions put forth by the Council arguing 
that the LBAA would not violate the Antideficiency Act.\18\ 
Specifically, GAO rejected the assertion that an appropriation 
by the District government would suffice for purposes of the 
Antideficiency Act, stating that only acts of Congress can make 
amounts available for expenditures or obligation by the 
District.\19\
---------------------------------------------------------------------------
    \16\Letter from Susan A. Poling, General Counsel, GAO, to Ander 
Crenshaw, Chairman, H. Comm. on Appropriations (Jan. 30, 2014).
    \17\Id.
    \18\Id.
    \19\Id.
---------------------------------------------------------------------------

Litigation of the LBAA

    Shortly after receiving a letter sent by Mayor Gray 
reflecting his revised position on the LBAA, the Council 
initiated litigation seeking a court order to enforce the 
LBAA.\20\ After removal to the U.S. District Court for the 
District of Columbia, District Court Judge Sullivan heard the 
case and issued an opinion declaring the LBAA unlawful.\21\ In 
that opinion, Judge Sullivan relied on the legislative history 
of the Home Rule Act and the language used in the Home Rule 
Act, particularly the prohibitions in sections 601, 602, and 
603.\22\ Judge Sullivan stated that the limitations in these 
sections were clear, and found unpersuasive the argument that 
the limitations applied only to the first year of the Home Rule 
Act's passage: 1973.\23\ Judge Sullivan found that the 
Council's position on the LBAA was ``inconsistent with the 
plain language of the statute, the rules of statutory 
construction, and the legislative history of the Home Rule Act. 
Section 603(a) is a limitation that prohibits the very change 
the Budget Autonomy Act purports to make'' (emphasis 
added).\24\
---------------------------------------------------------------------------
    \20\Memorandum from Brian T. Yeh to H. Comm. on Oversight and Gov't 
Reform (Apr. 18, 2016), (on file with Comm.).
    \21\ Council v. Gray, 42 f. supp. 3d 134 (D.D.C. May 19, 2014).
    \22\Id.
    \23\Id. at 147.
    \24\Id. at 150.
---------------------------------------------------------------------------
    Following Judge Sullivan's opinion, the Council appealed to 
the U.S. Court of Appeals, District of Columbia Circuit. 
However, during the appeals process, Mayor Gray was defeated by 
then-Councilwoman Muriel Bowser.\25\ After assuming Office, 
Mayor Bowser reversed the Office of the Mayor's position on the 
LBAA.\26\ In line with that change of position, the new Mayor 
then filed a motion suggesting mootness and asking the Circuit 
Court to reverse the District Court opinion, and remand the 
case to the District of Columbia Superior Court.\27\ The 
Circuit Court opinion granting the reversal and remand, states 
only that they are granting the Mayor's motion.\28\ 
Importantly, the testimony of former Attorney General Nathan, 
on May 12, 2016 asserts that the Circuit Court reversed the 
District Court only as a result of Mayor Bowser's reversal in 
support of the LBAA.\29\
---------------------------------------------------------------------------
    \25\Memorandum from Brian T. Yeh to H. Comm. on Oversight and Gov't 
Reform (Apr. 18, 2016), (on file with Comm.).
    \26\Id.
    \27\Id.
    \28\Council v. Bowser, et al, 2015 U.S. App. LEXIS 8881 (D.C. Cir. 
May 27, 2015) (order granting suggestion of mootness and motion to 
dismiss the appeal).
    \29\D.C. Home Rule: Examining the Intent of Congress in the 
District of Columbia Home Rule Act of 1973: Before the Subcomm. On 
Gov't Operations of the H. Comm. on Oversight and Gov't Reform, 114 
Cong. (May 12, 2016) (testimony of Irvin Nathan).
---------------------------------------------------------------------------
    The Superior Court of the District of Columbia, a local 
court, issued an opinion on the legality of the LBAA on March 
23, 2016.\30\ In that opinion, the judge rejected both the 
opinion of Judge Sullivan of the District Court and of GAO 
regarding the LBAA's legality and consistency with the 
Antideficiency Act and the Budget and Accounting Act.\31\ 
Instead, the judge's opinion found the LBAA was a lawful 
exercise of the District's authority under the Home Rule Act, 
and that it would not violate the Antideficiency Act.\32\
---------------------------------------------------------------------------
    \30\Council, et al v. Dewitt, Case No. 2014 CA 2371 B (D.C. Super. 
Ct. Mar. 23, 2016).
    \31\Id.
    \32\Id.
---------------------------------------------------------------------------
    As referenced above, on May 12, 2016, the Committee's 
Subcommittee on Government Operations held a hearing on the 
intent of Congress regarding the Home Rule Act, and how the 
LBAA contradicted that intent. In that hearing, multiple 
witnesses testified that the LBAA was a violation of the Home 
Rule Act and that implementing the LBAA absent affirmative 
Congressional approval would result in the District violating 
the Antideficiency Act. Notably, two of these witnesses, Mr. 
Irvin Nathan and Mr. Jacques DePuy--both supporters of Budget 
Autonomy in principle--acknowledged that the LBAA violated the 
Home Rule Act's grant of authority to the District.\33\
---------------------------------------------------------------------------
    \33\D.C. Home Rule: Examining the Intent of Congress in the 
District of Columbia Home Rule Act of 1973: Before the Subcomm. On 
Gov't Operations of the H. Comm. on Oversight and Gov't Reform, 114 
Cong. (May 12, 2016)
---------------------------------------------------------------------------
    As of May 19, 2016, there is ongoing litigation before the 
District Court of the District of Columbia on the LBAA. This 
action is being brought by a private citizen against the 
Council.\34\
---------------------------------------------------------------------------
    \34\See https://www.pacermonitor.com/public/case/9888230/
FELDMAN_v_BOWSER_et_al.
---------------------------------------------------------------------------

Need for legislation

    The LBAA is unlawful and null and void because the District 
exceeded the legislative authority delegated to it under the 
Home Rule Act. Congress is granted plenary and exclusive 
legislative authority of the District of Columbia by Article 1, 
Section 8, Clause 17 of the U.S. Constitution.\35\ Congress' 
grant of exclusive and complete legislative authority over the 
District therefore requires that Congress delegate those powers 
to the District in order for it to exercise any legislative 
power. To that end, in the Home Rule Act of 1973 Congress 
delegated to the District a limited number of legislative 
powers.\36\ The powers delegated to the District provided the 
District government the ability to legislative over solely 
local matters, such as zoning.\37\ However, Congress expressly 
removed from legislative authority it delegated to the 
District, the ability to alter the budget process. In section 
446 of the Home Rule Act, Congress laid out the express 
procedure for the budget process of the District. Namely, that 
the process requires a presentation of the budget by the Mayor 
to the President for transmission to the Congress, and for 
Congress to approve the budget by the federal appropriations 
process.\38\
---------------------------------------------------------------------------
    \35\U.S. Const. Art. 1, 8, cl. 17.
    \36\Jason I. Newman and Jacques B. DePuy, Bringing Democracy to the 
Nation's Last Colony: The District of Columbia Self-Government Act, 24 
American L. Rev. 3 538 (1975).
    \37\Id.
    \38\Id.
---------------------------------------------------------------------------
    The District's unilateral action in passing the LBAA, 
however, purported to change the budget process in its 
entirety. Under the LBAA, the District would instead pass its 
own budget for local funds, without going through the full 
appropriations review process. Instead, Congress's role, 
contrary to the intent of the Home Rule Act, is relegated to a 
passive 30-day review procedure. To remedy the statutorily 
impermissible LBAA, H.R. 5233 would restore the original intent 
of the Home Rule Act by reasserting the procedure outlined in 
the original version of section 446 of the Home Rule Act.
    Additionally, H.R. 5233 rectifies the District's unlawful 
actions in passing the LBAA in violation of the limitations 
contained in section 603(a) of the Home Rule Act. That section 
provides that nothing in the Home Rule Act changed in any way 
the budget process, or the role of Congress and the federal 
government in the District's budget process.\39\ To justify 
ignoring a plain reading of statute, the District asserted that 
the LBAA complied with the Home Rule Act because section 603(a) 
only applied to the state of affairs at the time the Home Rule 
Act was passed in 1973. However, as noted by Mr. Nathan, such a 
reading violates common sense.\40\ Further, as noted by Mr. 
DePuy, the express reversion of the role of Congress in the 
budget process put forth in section 603 was not temporary, but 
rather a permanent reservation of authority.\41\
---------------------------------------------------------------------------
    \39\Pub. L. No. 93-198 (1973).
    \40\D.C. Home Rule: Examining the Intent of Congress in the 
District of Columbia Home Rule Act of 1973: Before the Subcomm. On 
Gov't Operations of the H. Comm. on Oversight and Gov't Reform, 114 
Cong. (May 12, 2016) (testimony of Irvin Nathan).
    \41\D.C. Home Rule: Examining the Intent of Congress in the 
District of Columbia Home Rule Act of 1973: Before the Subcomm. On 
Gov't Operations of the H. Comm. on Oversight and Gov't Reform, 114 
Cong. (May 12, 2016) (testimony of Jacques DePuy).
---------------------------------------------------------------------------
    Importantly, H.R. 5233 will reassert the intent of Congress 
in section 603(a) of the Home Rule Act. First, H.R. 5233 
reestablishes and strengthens Congressional intent in 
preserving the original role of Congress and the federal 
government in the budget process for the District. H.R. 5233 
accomplishes this by repealing the attempted amendments to the 
Home Rule Act found in the LBAA. In doing so, the Home Rule 
Act, and the District will be brought back into compliance with 
the required budget process as required by Congress. Second, 
H.R. 5233 ensures that going forward the limitations in section 
603(a) cannot be misinterpreted to provide the District with 
authority to alter the budget process. Specifically, H.R. 5233 
clarifies that the Home Rule Act shall not be read to change 
any process related to the appropriation and budget procedure 
for the District. Furthermore, H.R. 5233 includes the addition 
of an express prohibition on the District of Columbia 
government from attempting to alter the budget and 
appropriations process as it relates to the District.
    In addition to violating the intent of the Home Rule Act, 
the LBAA is also contrary to the Antideficiency Act. The 
Antideficiency Act prohibits federal employees, which is 
defined to include employees of the District of Columbia, from 
expending or obligating funds absent a Congressional 
appropriation. As stated by GAO in their legal opinion on the 
LBAA, the Antideficiency Act applies to the District of 
Columbia. Notably, the Antideficiency Act applies to the 
District through provisions in both the Home Rule Act and the 
Antideficiency Act.\42\ As the agency tasked with investigating 
Antideficiency Act violations, GAO has considerable experience 
with that Act.\43\ In its legal opinion, GAO has stated that 
the case law on the Antideficiency Act clearly requires an act 
of Congress to satisfy the appropriations requirement to 
obligate and expend funds without being in violation of the 
Act. Under the LBAA, the District would be potentially be 
obligating and expending funds without a Congressional 
appropriation.\44\ Therefore, the District's obligation and 
expenditure of funds absent a Congressional appropriation would 
result in a violation of the Antideficiency Act. GAO rejected 
the District's argument that the ``general fund'' was a 
permanent appropriation, exempting a possible Antideficiency 
Act violation in their opinion.\45\
---------------------------------------------------------------------------
    \42\Letter from Susan A. Poling, General Counsel, GAO, to Ander 
Crenshaw, Chairman, H. Comm. on Appropriations (Jan. 30, 2014).
    \43\Id.
    \44\Id.
    \45\Id.
---------------------------------------------------------------------------
    This potential violation of the Antideficiency Act should 
the LBAA be implemented places District government employees at 
risk for possible administrative and criminal penalties. Under 
the Antideficiency Act, violations can result in administrative 
penalties that range from letters of reprimand to dismissal. 
Violations can also trigger criminal sanctions, provided the 
violation was done knowingly and willfully, that may range from 
fines to imprisonment, or both. These penalties apply to all 
employees, not just managers, supervisors, or elected 
officials. As GAO continues to believe that obligation or 
expenditure of funds under the LBAA would violate the 
Antideficiency Act, employees of the District Government remain 
at risk for penalties and sanctions. To address this situation, 
H.R. 5233 removes the potential for Antideficiency Act 
violations to District government employees expending or 
obligating funds under the LBAA, by repealing the LBAA.
    H.R. 5233 further ensures that the intent of Congress in 
the passage of the Home Rule Act is not misconstrued in the 
future by strengthening the application of the Antideficiency 
Act under the Home Rule Act. H.R. 5233 would clarify that the 
``general fund'' listed in section 450 of the Home Rule Act 
shall not be construed as a permanent appropriation and that 
all District funds are to be appropriated by Congress each year 
and subject to the relevant appropriation laws. This 
clarification would ensure that the District's budget remains 
in compliance with the process intended and required by 
Congress, and the Antideficiency Act. As with the other 
provisions of H.R. 5233, this amendment is done merely to 
reinforce and clarify what the Home Rule Act already states; it 
is not a change in the intent of the original act.

                          LEGISLATIVE HISTORY

    The Committee on Oversight and Government Reform 
Subcommittee on Government Operations held a hearing on May 12, 
2016 titled, ``D.C. Home Rule: Examining the Intent of Congress 
in the District of Columbia Home Rule Act of 1973''.
    After the hearing, on May 13, 2016, Congressman Mark 
Meadows (R-NC) introduced H.R. 5233, the Clarifying 
Congressional Intent in Providing for DC Home Rule Act of 2016. 
The bill was referred to the Committee on Oversight and 
Government Reform.
    On May 17, 2016, the Committee on Oversight and Government 
Reform ordered the legislation favorably reported by a record 
vote of 22 to14.

                           Section-by-Section


Section 1. Short title

    Designates the short title of the bill as the Clarifying 
Congressional Intent in Providing DC Home Rule Act of 2016.

Section 2. Repeal of Local Budget Autonomy Amendment Act of 2012

    This section would repeal the Local Budget Autonomy Act in 
its entirety, effective Fiscal Year 2013.

Section 3. Clarification of roles of District Government and Congress 
        in local budget process

    This section clarifies that ``the General Fund'' specified 
in section 450 of the Home Rule Act is not to be interpreted as 
a continuing appropriation. Further it clarifies that these 
funds are to be appropriated each fiscal year by Congress and 
that the District is subject to all applicable laws, including 
the Antideficiency Act, and restrictions to the appropriation 
in the relevant fiscal year.
    This section also amends section 603 of the Home Rule Act 
by removing the word ``existing'' to clarify that nothing in 
the Home Rule Act shall be interpreted to make changes to any 
law regarding the budget roles of Congress or the Federal 
Government. Section 603 is further amended by adding a 
provision clarifying that the District shall have no authority 
to make any changes to the role of the Federal Government in 
the District's budget process.

                       Explanation of Amendments

    During Full Committee consideration of the bill, Delegate 
Eleanor Holmes Norton (D-DC) offered an amendment to repeal the 
Local Budget Autonomy Act as passed by the District. The 
amendment would have instead codified the Local Budget Autonomy 
Act's language as a Congressional action amending the Home Rule 
Act. The amendment would also have added clarifications to Sec. 
603 of the Home Rule Act that would have strengthened the 
prohibition on the District's authority to make any changes to 
the role of the federal government in the District's budget 
process. The Norton amendment was not adopted by a roll call 
vote of 12 to 22.

                        Committee Consideration

    On May 17, 2016, the Committee met in open session and 
ordered reported favorably the bill, H.R. 5233, by roll call 
vote, a quorum being present.

                            Roll Call Votes

    There were two roll call votes during consideration of H.R. 
5233:


              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill repeals the Local Budget Autonomy Amendment Act of 
2012 and amends the District of Columbia Home Rule Act to 
clarify the respective roles of the District government and 
Congress in the local budget process of the District 
government. As such this bill does not relate to employment or 
access to public services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goal or objective of the bill is to repeal the Local Budget 
Autonomy Amendment Act of 2012 and amend the District of 
Columbia Home Rule Act to clarify the respective roles of the 
District government and Congress in the local budget process of 
the District government.

                    Duplication of Federal Programs

    No provision of this bill establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting this bill does direct 
the completion of specific rule makings within the meaning of 5 
U.S.C. 551 as follows.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandate Reform Act, P.L. 104-4) requires a statement as to 
whether the provisions of the reported include unfunded 
mandates. In compliance with this requirement the Committee has 
received a letter from the Congressional Budget Office included 
herein.

                         Earmark Identification

    This bill does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of Rule XXI.

                           Committee Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
this bill. However, clause 3(d)(2)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of 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 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 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 23, 2016.
Hon. Jason Chaffetz,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5233, the 
Clarifying Congressional Intent in Providing for D.C. Home Rule 
Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 5233--Clarifying Congressional Intent in Providing for D.C. Home 
        Rule Act of 2016

    H.R. 5233 would repeal the Local Budget Autonomy Amendment 
Act of 2012 (the Act), a law enacted by the District of 
Columbia that allows the District to spend local revenues 
without a Congressional appropriation. In particular, the bill 
would clarify that all funds provided for the District of 
Columbia must be appropriated by the Congress. Implementing the 
legislation would have no effect on the federal budget because 
any costs would be attributed to future appropriation acts.
    Enacting the bill would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting H.R. 5233 would not increase direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2027.
    Because preemptions limit the authority of state and local 
governments, they are considered intergovernmental mandates 
under the Unfunded Mandates Reform Act (UMRA). H.R. 5233 would 
impose such a mandate by repealing a law of the District of 
Columbia. Repeal of the Act would reduce the District's control 
over the nonfederal portion of its budget. However, even in the 
absence of the bill, CBO expects that the Congress would 
continue to exert considerable authority over the budget of the 
District. Enacting H.R. 5233 would invalidate any budget 
developed by the District's government under the Act and could 
impose administrative costs on the District associated with 
submitting a new budget. However, based on feedback from budget 
officials in the District, CBO estimates that the cost of the 
mandate would fall well below the annual threshold established 
in UMRA for intergovernmental mandates ($77 million in 2016, 
adjusted annually for inflation). The bill contains no private-
sector mandates as defined in UMRA.
    The CBO staff contacts for this estimate are Matthew 
Pickford (for federal costs) and Jon Sperl (for state and local 
mandates). The estimate was approved by H. Samuel Papenfuss, 
Deputy Assistant Director for Budget Analysis.

         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).

              LOCAL BUDGET AUTONOMY AMENDMENT ACT OF 2012

 An Act To amend the District of Columbia Home Rule Act to provide for 
                         local budget autonomy.

    Be It Enacted by the Council of the District of Columbia, 
[That this act may be cited as the ``Local Budget Autonomy 
Amendment Act of 2012''.
    [Sec. 2. The District of Columbia Home Rule Act, approved 
December 24, 1973 (87 Stat. 777; D.C. Official Code Sec. 1-
201.01 et seq.), is amended as follows:
    [(a) The table of contents is amended by striking the 
phrase ``Sec. 446. Enactment of Appropriations by Congress'' 
and inserting the phrase ``Sec. 446. Enactment of local budget 
by Council'' in its place.
    [(b). Section 404(f) (D.C. Official Code Sec. 1-204.04(f) 
is amended by striking the phrase ``transmitted by the Chairman 
to the President of the United States'' both times it appears 
and inserting the phrase ``incorporated in the budget act and 
become law subject to the provisions of section 602(c)'' in its 
place.
    [(c) Section 412 (D.C. Official Code Sec. 1-204.12) is 
amended by striking the phrase 14. ``(other than an act to 
which section 446 applies)''.
    [(d) Section 441(a) (D.C. Official Code Sec. 1-204.41(a)) 
is amended--by striking the phrase ``budget and accounting 
year.'' and inserting the phrase ``budget and accounting year. 
The District may change the fiscal year of the District by an 
act of the Council. If a change occurs, such fiscal year shall 
also constitute the budget and accounting year.'' in its place.
    [(e) Section 446 (D.C. Official Code Sec. 1-204.46) is 
amended to read as follows:
    [``ENACTMENT OF LOCAL BUDGET BY COUNCIL.
    [``Sec. 446. (a) Adoption of Budgets and Supplements.--The 
Council, within 70 calendar days, or as otherwise provided by 
law, after receipt of the budget proposal from the Mayor, and 
after public hearing, and by a vote of a majority of the 
members present and voting, shall by act adopt the annual 
budget for the District of Columbia government. The federal 
portion of the annual budget shall be submitted by the Mayor to 
the President for transmission to Congress. The local portion 
of the annual budget shall be submitted by the Chairman of the 
Council to the Speaker of the House of Representatives pursuant 
to the. procedure set forth in section 602(c). Any supplements 
to the annual budget shall also be adopted by act of the 
Council, after public hearing, by a vote of a majority of the 
members present and voting.
    [``(b) Transmission to President During Control Years.--
In'the case of a budget for a fiscal year which is a control 
year, the budget so adopted shall be submitted by the Mayor to 
the President for transmission by the President to the 
Congress; except, that the Mayor shall not transmit any such 
budget, or amendments or supplements to the budget, to the 
President until the completion of the budget procedures 
contained in this Act and the District of Columbia Financial 
Responsibility and Management Assistance Act of 1995.
    [(c) Prohibiting Obligations and Expenditures Not 
Authorized Under Budget.--Except as provided in section 
445A(b), section 446B, section 467(d), section 47I(c), section 
472(d)(2), section 475(e)(2), section 483(d), and subsections 
(f), (g), (h)(3), and (i)(3) of section 490, no amount may be 
obligated or expended by any officer or employee of the 
District of Columbia government unless--
          [``(1) such amount has been approved by an act of the 
        Council (and then only in accordance with such 
        authorization) and such act has been transmitted by the 
        Chairman to the Congress and has completed the review 
        process under section 602(c)(3); or
          [``(2) in the case of an amount obligated or expended 
        during a control year, such amount has been approved by 
        an Act of Congress (and then only in accordance with 
        such authorization).
    [``(d) Restrictions on Reprogramming of Amounts.--After the 
adoption of the annual budget or a fiscal year (beginning with 
the annual budget for fiscal year 1995), no reprogramming of 
amounts in the budget may occur unless the Mayor submits to the 
Council a request for such reprogramming and the Council 
approves the request, but and only if any additional 
expenditures provided under such request for an activity are 
offset by reductions in expenditures for another activity.
    [``(e) Definition.--In this part, the term ``control year'' 
has the meaning given such term in section 305(4) of the 
District of Columbia Financial Responsibility and Management 
Assistance Act of 1995.''.
    [(f) Section 446B(a) (D.C., Official Code Sec. 1-
204.46b(a)) is amended as follows:
          [(1) Strike the phrase ``the fourth sentence of 
        section 446'' and insert the phrase ``section 446(c)'' 
        in its place.
          [(2) Strike the phrase ``approved by Act of 
        Congress''.
    [(g) Section 447 (D.C. Official Code Sec. 1-204.47) is 
amended as follows:
          [(1) Strike the phrase. ``Act of Congress'' each time 
        it appears and insert the phrase ``act of the Council 
        (or Act of Congress, in the case of a year which is a 
        control year)'' in its place.
          [(2) Strike the phrase ``Acts of Congress'' each time 
        it appears and insert the phrase ``acts of the Council 
        (or Acts of Congress, in the case of a year which is a 
        control year)'' in its place.
    [(h) Sections 467(d), 471(c), 472(d)(2), 475(e)(2), and 
483(d), and 490(f), (g)(3), (h)(3), and (i)(3) are amended by 
striking the phrase ``The fourth sentence of section 446'' and 
inserting the phrase ``Section 446(c)'' in its place.
    [Sec. 3. Applicability.
    [Section 2 shall apply as of January 1, 2014.
    [Sec. 4. Fiscal impact statement.
    [The Council adopts the fiscal impact statement in the 
committee report as the fiscal impact statement required by 
section 602(c)(3) of the District of Columbia Home Rule Act, 
approved December 24, 1973 (87 Stat. 813; D.C. Official Code 
Sec. 1-206.02(c)(3)).
    [Sec. 5. Effective date.
    [This act shall take effect as provided in section 303 of 
the District of Columbia Home Rule Act, approved December 24, 
1973 (87 Stat. 784; D.C. Official Code Sec. 1-203.03).]
                              ----------                              


                   DISTRICT OF COLUMBIA HOME RULE ACT



           *       *       *       *       *       *       *
TITLE IV--THE DISTRICT CHARTER

           *       *       *       *       *       *       *


            Part D--District Budget and Financial Management

Subpart 1--Budget and Financial Management

           *       *       *       *       *       *       *


                       general and special funds

  Sec. 450. [The General Fund] (a) In General._The General Fund 
of the District shall be composed of those District revenues 
which on the effective date of this title are paid into the 
Treasury of the United States and credited either to the 
General Fund of the District or its miscellaneous receipts, but 
shall not include any revenues which are applied by law to any 
special fund existing on the date of enactment of this title. 
The Council may from time to time establish such additional 
special funds as may be necessary for the efficient operation 
of the government of the District. All money received by any 
agency, officer, or employee of the District in its or his 
official capacity shall belong to the District government and 
shall be paid promptly to the Mayor for deposit in the 
appropriate fund, except that all money received by the 
District of Columbia Courts shall be deposited in the Treasury 
of the United States or the Crime Victims Fund.
  (b) Application of Federal Appropriations Process.--Nothing 
in this Act shall be construed as creating a continuing 
appropriation of the General Fund described in subsection (a). 
All funds provided for the District of Columbia shall be 
appropriated on an annual fiscal year basis through the Federal 
appropriations process. For each fiscal year, the District 
shall be subject to all applicable requirements of subchapter 
III of chapter 13 and subchapter II of chapter 15 of title 31, 
United States Code (commonly known as the ``Anti-Deficiency 
Act''), the Budget and Accounting Act of 1921, and all other 
requirements and restrictions applicable to appropriations for 
such fiscal year.

           *       *       *       *       *       *       *


TITLE VI--RESERVATION OF CONGRESSIONAL AUTHORITY

           *       *       *       *       *       *       *


         budget process; limitations on borrowing and spending

  Sec. 603. (a) Nothing in this Act shall be construed as 
making any change in [existing] law, regulation, or basic 
procedure and practice relating to the respective roles of the 
Congress, the President, the Federal Office of Management and 
Budget, and the Comptroller General of the United States in the 
preparation, review, submission, examination, authorization, 
and appropriation of the total budget of the District of 
Columbia government[.], or as authorizing the District of 
Columbia to make any such change.
  (b)(1) No general obligation bonds (other than bonds to 
refund outstanding indebtedness) or Treasury capital project 
loans shall be issued during any fiscal year in an amount which 
would cause the amount of principal and interest required to be 
paid both serially and into a sinking fund in any fiscal year 
on the aggregate amounts of all outstanding general obligation 
bonds and such Treasury loans, to exceed 17 percent of the 
District revenues (less any fees or revenues directed to 
servicing revenue bonds, any revenues, charges, or fees 
dedicated for the purposes of water and sewer facilities 
described in section 490(a) (including fees or revenues 
directed to servicing or securing revenue bonds issued for such 
purposes), retirement contributions, revenues from retirement 
systems, and revenues derived from such Treasury loans and the 
sale or general obligation or revenue bonds) which the Mayor 
estimates, and the District of Columbia Auditor certifies, will 
be credited to the District during the fiscal year in which the 
bonds will be issued. Treasury capital project loans include 
all borrowing from the United States Treasury, except those 
funds advanced to the District by the Secretary of the Treasury 
under the provisions of title VI of the District of Columbia 
Revenue Act of 1939.
  (2) Obligations incurred pursuant to the authority contained 
in the District of Columbia Stadium Act of 1957 (71 Stat. 619; 
D.C. Code title 2, chapter 17, subchapter II), obligations 
incurred by the agencies transferred or established by sections 
201 and 202, whether incurred before or after such transfer or 
establishment, and obligations incurred pursuant to general 
obligation bonds of the District of Columbia issued prior to 
October 1, 1996, for the financing of Department of Public 
Works, Water and Sewer Utility Administration capital projects, 
shall not be included in determining the aggregate amount of 
all outstanding obligations subject to the limitation specified 
in the preceding subsection.
  (3) The 17 percent limitation specified in paragraph (1) 
shall be calculated in the following manner:
          (A) Determine the dollar amount equivalent to 14 
        percent of the District revenues (less any fees or 
        revenues directed to servicing revenue bonds, any 
        revenues, charges, or fees dedicated for the purposes 
        of water and sewer facilities described in section 
        490(a) (including fees or revenues directed to 
        servicing or securing revenue bonds issued for such 
        purposes), retirement, contributions, revenues from 
        retirement systems, and revenues derived from such 
        Treasury loans and the sale of general obligation or 
        revenue bonds) which the Mayor estimates, and the 
        District of Columbia Auditor certifies, will be 
        credited to the District during the fiscal year for 
        which the bonds will be issued.
          (B) Determine the actual total amount of principal 
        and interest to be paid in each fiscal year for all 
        outstanding general obligation bonds (less the 
        allocable portion of principal and interest to be paid 
        during the year on general obligation bonds of the 
        District of Columbia issued prior to October 1, 1996, 
        for the financing of Department of Public Works, Water 
        and Sewer Utility Administration capital projects) and 
        such Treasury loans.
          (C) Determine the amount of principal and interest to 
        be paid during each fiscal year over the term of the 
        proposed general obligation bond or such Treasury loan 
        to be issued.
          (D) If in any one fiscal year the sum arrived at by 
        adding subparagraphs (B) and (C) exceeds the amount 
        determined under subparagraph (A), then the proposed 
        general obligation bond or such Treasury loan in 
        subparagraph (C) cannot be issued.
  (c) Except as provided in subsection (f), the Council shall 
not approve any budget which would result in expenditures being 
made by the District Government, during any fiscal year, in 
excess of all resources which the Mayor estimates will be 
available from all funds available to the District for such 
fiscal year. The budget shall identify any tax increases which 
shall be required in order to balance the budget as submitted. 
The Council shall be required to adopt such tax increases to 
the extent its budget is approved.
  (d) Except as provided in subsection (f), the Mayor shall not 
forward to the President for submission to Congress a budget 
which is not balanced according to the provision of subsection 
603(c).
  (e) Nothing in this Act shall be construed as affecting the 
applicability to the District government of the provisions of 
section 3679 of the Revised Statutes of the United States (31 
U.S.C. 665), the so-called Anti-Deficiency Act.
  (f) In the case of a fiscal year which is a control year (as 
defined in section 305(4) of the District of Columbia Financial 
Responsibility and Management Assistance Act of 1995), the 
Council may not approve, and the Mayor may not forward to the 
President, any budget which is not consistent with the 
financial plan and budget established for the fiscal year under 
subtitle A of title II of such Act.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    Committee Democrats strongly oppose H.R. 5233. The bill 
would impose the most significant limitation on the District of 
Columbia's legislative authority since passage of the Home Rule 
Act in 1973.\1\ The bill also would harm the District's 
financial position and operations.
---------------------------------------------------------------------------
    \1\Pub. L. No. 93-198 (1973).
---------------------------------------------------------------------------
    Reasonable lawyers and judges have reached different 
conclusions about the validity of the Local Budget Autonomy 
Amendment Act of 2012 (BAA). There is no doubt, however, that 
the BAA is the law of the District. The only court opinion in 
effect upheld the BAA.\2\ Indeed, the court ordered all 
District employees to enforce the BAA.
---------------------------------------------------------------------------
    \2\Council of the District of Columbia v. Bowser, Case No. 2014 CA 
2371 B (D.C. Super. Ct. 2016).
---------------------------------------------------------------------------
    Budget autonomy has practical benefits for both the 
District and federal governments. For the District government, 
it means lower borrowing costs; more accurate revenue and 
expenditure forecasts; improved agency operations; and the 
removal of the threat that federal government shutdowns can 
also shut down the District government. For Congress, it means 
not wasting valuable time on budget line items that it never 
amends. For federal agencies, it means that the D.C. municipal 
services they rely on to function will not cease during a 
federal shutdown.
    There has been bipartisan support for budget autonomy. The 
Committee's last four chairmen, including Republicans Tom Davis 
and Darrell Issa, worked to give the District budget autonomy.
    On May 12, 2016, the Subcommittee on Government Operations 
held a hearing on the validity of the BAA during which two of 
the Republicans' own witnesses provided testimony in support of 
budget autonomy. Irvin B. Nathan, a former D.C. Attorney 
General, stated:

          I believe that budget autonomy for the locally raised 
        revenues of the District is sound and appropriate 
        public policy and should be enacted by the Congress and 
        signed by the President. . . . I believe that the best 
        thing that can come from this hearing is support in 
        Congress for the passage of federal legislation 
        providing to the District budget autonomy for its 
        locally raised funds.\3\

    \3\House Committee on Oversight and Government Reform, Hearing on 
D.C. Home Rule: Examining the Intent of Congress in the District of 
Columbia Home Rule Act of 1973, 114th Cong. (May 12, 2016).

    In addition, Jacques DePuy, a former Counsel for the House 
Subcommittee on Government Operations and Reorganization of the 
Committee on the District of Columbia, stated:
          [I] agree with the parties that, as a matter of 
        public policy and of the fundamental values of a 
        democracy, it is the duly elected representatives of 
        the citizens of the District of Columbia who should 
        determine how D.C. tax-payer money is spent.\4\
---------------------------------------------------------------------------
    \4\Id.

    Congress loses no authority under budget autonomy. Under 
the BAA, the local portion of the D.C. budget will be 
transmitted to Congress for a review period like all other D.C. 
legislation. During the review period, Congress can use 
expedited procedures to disapprove of the budget. Moreover, 
under the U.S. Constitution, Congress has the authority to 
legislate on any District matter, including its local budget, 
at any time, notwithstanding the BAA.
    The District's financial position is stronger than that of 
most cities and states. The District has a positive fund 
balance, or reserves, of $2.17 billion relative to a total 
budget of $13.4 billion.
    There is little risk that the District will lose its 
financial discipline under the BAA because all the federal 
financial mandates on the District remain in place. These 
include an independent Chief Financial Officer, a borrowing 
cap, and emergency and contingency reserve accounts. Moreover, 
the D.C. Financial Responsibility and Management Assistance 
Authority, which Congress put in place in 1995 to address the 
District's financial crisis, automatically comes back into 
existence if the District fails to meet any of seven financial 
conditions.
    We strongly oppose H.R. 5233, and urge the Committee to 
codify the BAA in federal law.
                                   Elijah E. Cummings,
                                           Ranking Member, Committee on 
                                               Oversight and Government 
                                               Reform.
                                   Eleanor Holmes Norton,
                                           Member of Congress.
                                   Gerald E. Connelly,
                                           Ranking Member, Subcommittee 
                                               on Government 
                                               Operations.