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Northeast-Midwest Economic Review -- 30 June 1997

                   Northeast-Midwest Institute

                          WEEKLY UPDATE

                           30 June 1997

                         TOP OF THE NEWS

     The House Appropriations Committee last week approved a bill that
increases funding for two key energy programs: Office of Industrial
Technologies (OIT) and the Energy Information Administration (EIA).

     The bill appropriates $179 million for OIT in fiscal 1998, $61
million above the fiscal 1997 level.  It provides $66.8 million for
EIA, a $4 million increase over the current fiscal year.  The panel
also approved level funding of $29 million for State Energy
Conservation grants.

     In April, 33 members of the Northeast-Midwest Congressional
Coalition wrote to Representative Ralph Regula (R-OH), chairman of the
House Interior Appropriations Subcommittee, requesting that his panel
allocate $139 million for OIT, $62.8 million for EIA, and $38.6
million for State Energy Conservation grants.  (Note:  The increased
funding for OIT includes $44.6 million for the advanced turbine
systems program previously within the fossil fuels account.  Yet even
taking into account the additional responsibility, OIT will receive a
$16.4 million, or 14 percent, increase over fiscal 1997.)

     CONTACTS:  Diane DeVaul and David Richardson at the Northeast-
Midwest Institute (544-5200).

     A brownfield tax credit provision supported by numerous
Northeast-Midwest Senate Coalition members was included in the tax
bill approved last week by the Senate.  A provision that would have
taxed kerosene, opposed by the Coalition, was left out.

     The brownfield provision -- co-sponsored by Senators Carol
Moseley Braun (D-IL), Joseph Lieberman (D-CT), Spencer Abraham (R-MI),
Alfonse D'Amato (R-NY), and James Jeffords (R-VT) -- would allow
purchasers of brownfields in certain qualified areas to write off the
costs of cleaning up contamination in the year they occur.  Qualified
sites include existing empowerment zones and enterprise communities,
and the 76 brownfield pilot sites identified by the Environmental
Protection Agency.  The provision was not included in the House tax
bill, but is strongly supported by the Clinton administration.

     Members of the Northeast-Midwest Senate Coalition successfully
blocked a plan to reclassify kerosene and subject it to the tax and
dye scheme applicable to diesel fuel.  The House bill would impose a
new tax of 24.3 cents a gallon on kerosene, as well as a cumbersome
rebate arrangement that would force buyers to show they are using the
fuel for non-transportation purposes.

     CONTACT:  Geoff Brown at the Northeast-Midwest Senate Coalition

     A bipartisan group of 32 senators, including 17 from the
Northeast-Midwest Senate Coalition, last week urged that the pending
multi-billion-dollar highway bill include programs to advance high-
speed rail.

     In a letter to the chairmen and ranking minority members of the
Senate Commerce Committee and the Environment and Public Works
Committee, the senators urged the inclusion of initiatives that "fund
and facilitate high-speed ground transportation development."  The
letter, sponsored by Senators Arlen Specter (R-PA) and Ron Wyden (D-
OR), states, "By providing innovative financial support and increased
state spending flexibility (of federal highway funds), the federal
government can help provide a catalyst for continued state and
private-sector leadership in the development of high-speed train

     The Northeast-Midwest organizations worked with the High-Speed
Ground Transportation Association to generate support for this letter.

     CONTACT:  David Richardson at the Northeast-Midwest Institute

     Four House Appropriations subcommittees last week marked up
spending bills of particular interest to the Great Lakes community. 
The Great Lakes appear to have fared well in the Interior bill, with
$2.192 million in funding provided for the Fish and Wildlife Service's
Aquatic Nuisance Species Program.  While this funding equals the
administration's requested budget, specific amounts for the Great
Lakes are not detailed.  The Biological Resources Division of the U.S.
Geological Survey (formerly National Biological Service) received an
increase of $10.3 million, or $2.8 million over the administration's
request.  More than $4 million of this increase is specified for the
Cooperative Research Units that address high-priority information
requests of resource management agencies.  An increase of $1 million
also was provided for Great Lakes fish and wildlife restoration

     The Agriculture subcommittee's bill, tentatively scheduled for
review by the full committee on July 9, provides level funding
($350,000) for the Great Lakes Basin program.  The panel also approved
an increase of $10 million for Section 319 Nonpoint Source Pollution
Grants and Clean Lakes Program, and a $15 million increase for Section
106 Water Quality Grants.

     The Transportation subcommittee marked up its bill on June 24th,
but the panel has not yet released appropriations levels.

     CONTACT:  Rochelle Sturtevant at the Northeast-Midwest Senate
Coalition and Senate Great Lakes Task Force (224-4229).  Further
appropriations updates will be available on the Northeast-Midwest
Institute's home page at http://www.nemw.org.

     The Northeast-Midwest Institute recently released a report on
reforming the Tennessee Valley Authority (TVA) and the Power Marketing
Administrations (PMAs) in a competitive electricity environment.  The
38-page publication notes that the federal government is this nation's
largest generator and supplier of electricity, and that these enormous
taxpayer-supported institutions are under increased scrutiny as
Congress tries to balance the federal budget and bring competition
into the electricity industry.

     The substantial taxpayer subsidies to TVA and PMAs are criticized
from several angles:  They distort the market, discourage efficiency,
waste taxpayer dollars, and pit regions against each other.

     CONTACT:  Dick Munson at the Northeast-Midwest Institute (544-