In this issue:

F E D E R A L
House FY 2011 Spending Bill Slashes Planning

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President Obama Releases His FY 2012 Budget Proposal

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HUD Budget Proposal Contains No New Programs

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Transportation Budget Request Includes Reauthorization Proposal

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New Focus on Livability in Transportation

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EPA Budget Cut by 13 Percent

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Department of Commerce Budget Includes Funding for Regional Innovation

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USDA Funding Decreases in Anticipation of the Farm Bill

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House T&I to Hold Field Hearings

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USDA Forest Service Proposes New Rule on Land Management Plans

HUD Highlights: HOPE VI and Sustainable Communities Initiative Eliminated
The bill eliminates the entire budgets of HOPE VI, BEDI, and the Energy Innovation Fund, and it rescinds any unobligated funds for those programs. It reduces the Community Development Fund budget to $1.5 billion (down from $4.45 billion in the FY10 enacted budget). The bill requires those funds go only to Community Development Block Grants, prohibits funding of the Sustainable Communities Initiative, and rescinds $130 million that was previously appropriated for the program. HOME grants are also cut.

DOT Highlights
The House Republican proposal includes severe cuts to key transportation programs. It proposes zeroing out funding for high speed rail, TIGER grants, and the Washington Metropolitan Area Transit Authority (WMATA). It also cuts funding to Capital Investment Grants in transit and Amtrak capital and debt service funding. As part of the money-saving scheme, funding is rescinded from FY10 allocations for high speed rail, TIGER II, Capital Investment Grants, and Amtrak.

EPA Highlights
The proposal takes aim at reducing the ability of the Environmental Protection Agency to regulate greenhouse gas emissions in a meaningful way with roughly $3 billion in proposed cuts. Specifically, the measure would block funding for EPA to implement new regulations on GHG emissions from stationary sources. In conjunction with the reduction in funding, the House Energy and Commerce Committee is readying legislation to block EPA climate rules entirely under the Clean Air Act.

The bill also makes deep cuts in the Department of Health and Human Services budget and the Community Service Block Grant program. The proposed cuts in HR 1 could have a major impact on local government budgets and funding.

President Obama Releases His FY 2012 Budget Proposal
DESPITE BUDGET CUTS, SUSTAINABILITY FUNDING EXPANDED AT EPA AND DOT

On February 14, the President released his FY12 budget request, which includes $33 billion in savings when compared with FY10 and $11 trillion in savings over the next decade. The administration's goal when drafting the budget was to reduce the deficit to 3 percent of the economy within a decade, while still focusing on "winning the future" by "out educating, out building and out innovating the competition." The Obama plan for FY12 stands in stark contrast to the FY11 CR plan passed by the House, suggesting that the debate over spending priorities is likely to be a defining element of the 112th Congress.

Sustainability and livability funding fared well in comparison with cuts in other areas of the budget. At HUD, the Sustainability Initiative within CDBG was eliminated, but the Office of Sustainability was established with the same level of funding as the Sustainability Initiative, and the Office for Sustainable Communities at EPA received a funding increase of $4.2 million from FY10 enacted. The DOT budget includes over $7.6 billion for its livability programs; $10 million of that funding goes to support the interagency partnership, develop performance standards, and direct technical assistance.

HUD Budget Proposal Contains No New Programs
SUSTAINABILITY AND LIVABILITY FUNDING MAINTAINED

Overall, the HUD budget was reduced by 1 percent. However, the administration has made livability and sustainability principles a part of its larger infrastructure goals, so the bulk of the reductions were not in those types of programs. In a statement on the HUD website, Secretary Shaun Donovan said, "The budget provides a roadmap for HUD to work with our regional and local partners to win the future by investing in innovation, building neighborhoods that are connected to jobs, and providing greater access to opportunity, so American businesses and communities are the best in the world."

After two years of major changes and new programs, the administration this year did not introduce any new programs, instead deciding to focus resources on moving forward with programs that have been proposed in the last two years.

Community Development Block Grants
In the weeks leading up to the budget release, Office of Management and Budget Director Jacob Lew and other administration officials highlighted the $300 million, 7.5 percent cut to the CDBG budget as one of the most painful cuts of the FY12 budget proposal. However, the administration pulled $150 million of that cut from the Sustainable Communities Initiative and made it a program with a separate budget from CDBG.

Office of Sustainable Housing and Communities
Pulled from the CDBG budget and made into a separate program, the Office of Sustainable Housing and Communities continues the cross-agency collaborations among HUD, DOT, and EPA. The funding provides $100 million for regional planning grants, $40 million for challenge grants, and $10 million for research tools and best practices.

Transportation Budget Request Includes Reauthorization Proposal
SIX-YEAR PLAN WOULD PROVIDE $556 BILLION FOR TRANSPORTATION INVESTMENT

The administration's FY12 budget request for the Department of Transportation includes major new investments and structural changes that signify a strong commitment to transportation, particularly in comparison with the austere FY11 Continuing Resolution proposed by House Republicans. The administration has based its budget request around a six-year, $556 billion surface transportation reauthorization plan. Program consolidation and an increased commitment to livability programs are key themes of the plan. Over six years, the administration proposes investing $336 billion in highways, $119 billion in transit, $50 billion in "Up-Front" investment, $30 billion in a National Infrastructure Bank, and $53 billion in high speed rail.

Whether the administration will put out a full legislative text or simply provide input on a Congressional proposal has yet to be determined. More details on specific programs and eligibilities are expected to be released by the administration as Congress moves forward with reauthorization.

New Focus on Livability in Transportation
$7.6 BILLION FOR LIVABLE COMMUNITIES

The Obama administration continues its commitment to fostering livable communities with a request of over $7.6 billion for such programs within the Department of Transportation. This funding includes $10 million for the Livable Communities account in the Office of the Secretary for coordinating the interagency partnership with EPA and HUD, as well as developing performance standards and providing direct technical assistance to communities. The Federal Highway Administration's request includes $4.1 billion for its Livable Communities program, which is now one of its five streamlined programs. The Federal Transit Administration includes $3.5 billion in its request for a Transit Expansion and Livable Communities program that includes many existing programs, as well as new demonstration grants.

The FHWA request of $4.1 billion for FY 2012 is part of a plan for $28 billion in investment over six years. The Livable Communities program includes:

• A new $3.4 billion formula-based program for rural and urban projects.
• A new $500 million competitive grant program to promote innovative, multi-modal, and multi-jurisdictional highway projects that promise significant environmental and economic benefits to an entire metropolitan area, a region, or the nation.
• A $200 million discretionary grant program to support metropolitan transportation planning capacity building.

The Transit Expansion and Livable Communities Program within FTA includes:

• $3.2 billion for a Capital Investment Grants program ($1 billion from the "Up-Front" boost)
• $140 million for planning programs
• $50 million in funding for new Livable Communities demonstration grants
• $28 million for Transit in the Parks
• $15 million for Tribal Transit

Details on eligibilities and program specifics are still being worked out and are expected to be released as Congress moves forward with a surface transportation reauthorization bill.

EPA Budget Cut by 13 Percent
CLEAN WATER STATE REVOLVING FUND CUT BY $947 MILLION

With an overall budget reduction of $1.3 billion, or nearly 13 percent, EPA has included in its priorities GHG emission reduction activities, state and tribal categorical grants, and enforcement of environmental and public health protections. The majority of the budget reduction comes from the Clean Water State Revolving Fund, which was cut by $947 million to just over $1.5 billion. Other cuts target water infrastructure spending, Local Government Climate Change Grants, and the Great Lakes Restoration Initiative, much of which the agency argued was redundant spending.

However, the budget increases funds for the EPA Smart Growth office to $9.9 million, an additional $4.2 million from the enacted level of funding.

Brownfields
The President's budget proposal for EPA includes $99 million for brownfields projects. With the FY 2012 request, EPA plans to focus resources on the brownfields area-wide planning effort, which will fund approximately 20 projects with a combination of grant and technical assistance funding.

Department of Commerce Budget Includes Funding for Regional Innovation
ECONOMIC DEVELOPMENT AGENCY TO GET COMPETITIVE GRANTS FUNDS

The President's FY12 budget proposal invests $40 million in the Economic Development Agency to develop a new Regional Innovation Program in a coordinated effort between HUD, EDA, and USDA. The program would target "Growth Zones" to foster collaboration across the federal government to build regional innovation clusters based upon the inherent strengths of local communities. The Regional Innovation Program included in the proposal was authorized under the America COMPETES Act, passed late last year. Currently, the program outline provides for 20 competitive grants for clusters of accelerated economic growth, balanced between urban and rural settings. The administration is still working though the interagency partnership to determine further details.

USDA Funding Decreases in Anticipation of the Farm Bill
HEALTHY FOOD FINANCING RECEIVES $35 MILLION

The FY12 proposal for USDA includes a $2 billion reduction in spending, for a total budget authority of approximately $145 billion. This includes a proposed decrease in agricultural spending of $2.5 billion over the next 10 years in anticipation of debate over the Farm Bill, which is the legislation authorizing many USDA programs. The request also includes $35 million for the Healthy Food Financing Initiative (HFFI), which was introduced in last year's budget proposal but never passed. As part of the HFFI, USDA will increase the availability of affordable food in underserved urban and rural communities.

Watershed
Watershed Flood Prevention Operations and the Watershed Rehabilitation Program were both zeroed out under the President's proposal. In a stakeholders' presentation, Agriculture Secretary Tom Vilsack stated that while the programs were sound, they were too small to be effective, and such projects could be funded by other sources. USDA is continuing to request funds to implement Strategic Watershed Action Teams at $15 million.

Wetlands Reserve Program
The Wetlands Reserve Program, a target of House Republicans in their proposed bill, would receive a $172 million bump for a total of $785 million for the program. The Environmental Quality Incentives Program would similarly receive an additional $220 million for a total of $1.4 billion in the President's budget.

House T&I to Hold Field Hearings
HEARINGS WILL FOCUS ON NEW SURFACE TRANSPORTATION BILL

Rep. John Mica (R-Fla.), who chairs the House Transportation and Infrastructure Committee, says he intends to start a process that will help craft a new multi-year surface transportation bill. Mica says he plans to hold "listening sessions" outside of Washington to get input from local and regional officials on what should be in the next transportation legislation. The new T&I chairman has stated he wants to retool some current surface transportation programs to "save money, speed up projects to release funds already approved, spur greater use of infrastructure loans from existing federal government programs and give more incentives to private firms to invest in transportation projects."

In addition, 19 of the committee's 33 members are new in this Congress, so the chairman is looking to educate those members on the role and process surrounding financing and implementing federal transportation priorities. The sessions will include invited witnesses to discuss transportation issues related to the upcoming surface transportation reauthorization, and the public is invited to attend. The committee reportedly will be accepting written testimony from the public as well.

More information on the sessions is available at http://transportation.house.gov/

USDA Forest Service Proposes New Rule on Land Management Plans
NEW RULE AIMED AT PROMOTING VIBRANT COMMUNITIES

On February 10, the USDA Forest Service released its proposed Forest Planning Rule, which would establish a new national framework to develop land management plans, intended to both protect water and wildlife and promote vibrant communities. The proposed rule is the most recent of multiple attempts to update the current standard, which has been in place since 1982.

Forest Service land management plans guide management activities on the 155 national forests and 20 grasslands in the National Forest System. The proposed planning rule provides "a collaborative and science-based framework" for creating land management plans. It includes new provisions to guide forest and watershed restoration and resilience, habitat protection, sustainable recreation, and management for multiple uses of the National Forest System, including timber.

Publication of the proposed planning rule in the Federal Register marks the start of a 90-day public comment period, ending May 16, in which a broad range of stakeholders, including APA, is expected to comment. To encourage public engagement, the Forest Service will host an open forum to discuss the proposed rule on March 10, 2011, in Washington, D.C., in addition to public forums planned throughout the country.