[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\
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\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).
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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.
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\5\GAO, Principles of Federal Appropriations Law 3rd, (Aug. 6,
2010), available at http://www.gao.gov/special.pubs/d06382sp.pdf.
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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.
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\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.
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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\
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\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).
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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\
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\13\ Id.
\14\Id.
\15\Id.
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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\
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\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.
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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\
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\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.
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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\
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\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).
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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\
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\30\Council, et al v. Dewitt, Case No. 2014 CA 2371 B (D.C. Super.
Ct. Mar. 23, 2016).
\31\Id.
\32\Id.
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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\
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\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)
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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\
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\34\See https://www.pacermonitor.com/public/case/9888230/
FELDMAN_v_BOWSER_et_al.
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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\
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\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.
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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\
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\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).
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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\
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\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.
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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.