State-Federal Relations

NCSL's Lobbying Activities for 2001

Updated January 11, 2002

This report summarizes NCSL's advocacy activities on issue priorities for the first session of the 107^th Congress. It includes brief bill and regulation descriptions, summaries of their potential impact on states and NCSL's position and action taken.

Any priority issue considered during the first session of the 107^th Congress that remains unresolved is included in NCSL'S LOBBYING PRIORITIES FOR 2002. Some of the issues described, particularly appropriations matters, recur annually

MAJOR VICTORIES FOR STATES IN 2001.

ELECTRONIC COMMERCE. NCSL sought passage of legislation combining authority to collect sales and use taxes from remote sellers with streamlining of state sales and use tax collection systems. Each prominent bill attempting to accomplish such was fraught with substantive and political problems. Several bills required states to streamline according to federally dictated standards, with congress having veto authority over state streamlined systems. Given these unacceptable provisions, NCSL was instrumental in formulating compromise legislation extending the moratorium on Internet access and multiple and discriminatory taxes for two years (to November 1, 2003). The compromise enacted as H.R. 1552 allows states additional time to finalize an interstate agreement to streamline and simplify their sales and use tax collection systems and to enact and implement those simplifications. It also presents an opportunity to return to congress seeking authorization to collect these taxes from remote sellers based on accomplishments made with streamlining, on state-determined terms.

EDUCATION REFORM. NCSL sought governance changes, increased flexibility of federal education program spending without unfunded mandates and special education funding increases among its major objectives in legislation re-authorizing the Elementary and Secondary Education Act (ESEA). The conference agreement produced mixed results. The annual testing requirement has an appropriations "trigger", abrogating the testing mandate in any year federal funding falls below specified levels. The adequate yearly progress and most other mandates have multiple exceptions, allowances for states to substitute their own programs, or have drawn-out compliance dates - rendering their impact negligible, further suggesting that NCSL apparently beat back most or all offensive unfunded mandates. None of the governance changes, giving state legislatures greater control over federal education dollars, were enacted. While special education funding got a boost, it is not the mandatory, incremental increase up to 40% of part B expenditures sought.

APPROPRIATIONS. Federal funding of major discretionary and mandatory state-federal partnerships rose by over $26 billion, or 8%, for FY2002. NCSL successfully advocated for maintaining statutorily authorized spending for Medicaid, TANF, highways and mass transit, airports and SCHIP. NCSL sought and accomplished increases for special education, LIHEAP, weatherization assistance, state energy grants, safe and stables families programs and the drinking water state revolving fund. Funding was maintained at the previous year's level for health block grants, state criminal alien assistance and the clean water state revolving fund. NCSL additionally sought increases for state bio-terrorism preparedness and security included in end-of-session appropriations measures.

SPECIAL EDUCATION. NCSL had two major lobbying objectives regarding the funding of part B expenditures of the Individuals with Disabilities Education Act. One of those was increasing annual funding of what is a long-standing, egregious unfunded federal mandate. For FY 2002, states will receive $867 million more than last year, a 12% increase. The second objective, which included making IDEA funding mandatory and incrementally reaching 40% federal funding for part B expenditures, failed in the last days of the congressional session. This issue returns in 2002.

HEALTH. Appropriations conferees expressed their opposition to U.S. Department of Health and Human Services proposed regulations that would modify Medicaid upper payment limits for states, modifications that could cost states nearly $12 billion. NCSL also played an instrumental role in delaying the implementation of the uniform transaction and code set regulation (Health Insurance Portability and Accountability Act - HIPAA) for an additional year, a regulation requiring standard formats for electronic data transmissions (affects Medicaid, public health activities, state employee health benefits),

PENSION PORTABILITY. Included in the comprehensive 2001 federal tax cut package were provisions enhancing public pension portability and simplification. This enacted legislation facilitates purchase of service credits by public employees and allows older workers to make catch-up contributions. The tax bill modernized rules for deferred compensation plans and repealed compensation-based limits that curtailed retirement savings of public employees.

ELECTION REFORM. Initially, NCSL pursued a block grant approach to funding state-driven election reforms, but the block grant concept found few supporters. To ensure that election conduct was not federalized or governed by federal mandates, NCSL labored throughout the year to craft legislation that would accomplish key changes to fortify state election administration and to protect voting rights. Associated with that major goal was obtaining federal funding to carry out a wide array of election conduct changes and voting machinery purchases in concert with individual state needs. NCSL achieved these objectives in H.R. 3295, bipartisan legislation that passed the U.S. House of Representatives 362-63 in December. The issue carries over to 2002.

BROWNFIELDS. Passed on the very last day of the congressional session, H.R. 2869 authorizes a boost in the federal government's commitment to state assessment and cleanup of brownfields sites. The new law will add $1.25 billion over five years to ongoing state cleanup efforts. The legislation also restricts EPA intervention at state-approved cleanup sites. Included in H.R. 2869 are Superfund liability protections for small businesses.

PREEMPTION/UNFUNDED MANDATES. NCSL maintained preemption and unfunded mandates as a perennial advocacy target. Lobbying efforts notably shifted the content of faith-based legislation (See 2002), patients bill of rights (See 2002), education reform (see following section) and electronic commerce and business activity tax bills. Others are highlighted among summaries for 2001 and 2002.

LOSSES FOR STATES IN 2001

TANF SUPPLEMENTAL GRANTS. A year-long effort to continue, for one year, the TANF supplemental grant program came up short as Congress and the administration failed to appropriate funds to keep the program alive. The year started as NCSL successfully advocating for insertion of $319 million in the annual budget resolution for the TANF supplemental program. Later, the Senate passed legislation re-authorizing the program for one year. However, these two successes could not be converted into final funding action. The TANF supplemental program, an original component of the 1996 federal welfare reform law, provided specific states with historically low levels of per capita welfare spending and high population growth with additional TANF funds.

TRANSPORTATION FUNDING. Annual appropriations for highways, mass transit, safety and airports met the guarantees in TEA-21 and AIR-21 for trust fund distributions. However, appropriators redirected and reduced highway trust fund distributions by $650 million. This reduction was made to "revenue adjusted budget authority (RABA). RABA represents apportionments to states for federal highway programs when trust fund revenues exceed estimates, which they did for FY2002. Appropriations took $650 million of the $4.5 billion excess for specific projects, a violation of TEA-21 that will become the focus of TEA-21 reauthorization hearings in 2002.

PREEMPTION/UNFUNDED MANDATES. States confronted a notable increase in legislative and regulatory attempts to preempt states and/or leave them with new unfunded mandates. Enactment of an accelerated sunset of state piggyback and death tax credits will reduce state revenues by $65-100 billion over the next four years, while the federal estate tax remains in effect, at reduced rates, for the next ten years. Privacy and telecommunications/technology issues raise preemption questions regularly. Others are highlighted in the 2001 and 2002 summaries.

AIR-21; State Airport Improvement Grants
Brownfields
Business Activity Taxes
Child Care and Development Block Grant
Clean Water State Revolving Fund
Collective Bargaining
Criminal Alien Assistance Program (SCAAP)
Drinking Water State Revolving Fund
Education Reform
Electronic Commerce - Internet Tax Moratorium
Electronic Commerce - Sales Tax Collections
Energy Appropriations
Estate Tax
Legal Immigrants
LIHEAP
Medicaid - Family Opportunity Act

Medicaid - Flexibility
Medicaid - Managed Care
Medicaid - Psychiatric Residential Treatment Facilities
Medical Records Privacy
Pension Reform
Safe and Stable Families
SCHIP - FY 2002 Funding
SCHIP - Regulations
School Construction
Social Services Block Grant
Special Education
State Bank Exam Fees
TANF Block Grant
TANF - Supplemental Grants
TEA-21 Transportation Funding
Tobacco -- Gray Market

*ISSUE*	BILLS/REGULATIONS	STATUS
AIR-21; STATE AIRPORT IMPROVEMENT GRANTS	The President's FY2002 budget and H.R 2299 (P.L107-87). H.R 2299, the congressional budget resolution and the president's budget provide guaranteed funding for AIR-21 aviation programs. The state airport improvement grant program is increased 3% over FY2001.	NCSL supported funding levels as guaranteed in AIR-21. H.R.2299, H.Con.Res 83 (the '02 budget resolution) and the president's budget all supported guaranteed funding levels. NCSL urged full funding in a February 8 letter to the president. H.R.2229 provides guaranteed funding for state airport improvement grants for FY2002, a 3% increase for the program.
BROWNFIELDS	H.R.2869 (P.L.107-). Increases authorized funding for assessment and cleanup grants by $250 million annually. Provides Superfund liability relief to property owners and devolves additional authority for brownfields cleanups to the states. Restricts EPA intervention in state-approved cleanups.	NCSL supported brownfields legislation in several communications to and testimony before the Congress. NCSL sought even more strict "finality" provisions (regarding EPA intervention in state approved cleanups) than enacted. H.R.2869 passed both houses in December, 2001. Signed into law on January 11, 2002.
BUSINESS ACTIVITY TAXES	S. 288, S.664, S.1567. S.288 and S.664 would severely limit a state's ability to impose and collect business income or activity taxes on out of state businesses using current nexus standards. This legislation would cost states approximately $10-$12 billion a year. S.1567 provides a sense of the Senate to have congress address nexus standards for state business activity taxes.	NCSL's Task Force on State and Local Taxation of Telecommunications and Electronic Commerce will review the need to address nexus standards for business activity taxes in the new economy. Pending completion of the review by the Task Force, NCSL opposed any Congressional efforts to impose federal nexus standards. NCSL resisted attempts to restrict state imposition of business taxes during consideration of electronic commerce and Internet tax moratorium extension legislation.
CHILD CARE AND DEVELOPMENT BLOCK GRANT	H.Con.Res 83 and the president's FY2002 budget, S.1536, H.R.3061. H.Con.Res 83 and the president's budget provide $2.2 billion for FY 2002, a 10 percent increase over FY2001, but $400 million of the proposed funding is earmarked for after-school care certificates. S.1536 and H.R.3061 provides $2.1 billion without earmarks.	NCSL supported CCDBG increases and opposed earmarks of CCDBG funds generally, regardless of their merit, because they compromise state flexibility and reduce funding for a program's original purpose. H.R.3061 provides a $150 million or 6% increase without earmarks. Signed into law on January 10, 2002.
CLEAN WATER STATE REVOLVING FUND	H.Con. Res. 83 and the president's FY2002 budget. Proposes a 37 % reduction in funding, from $1.3 billion (FY2001) to $850 million. H.R. 2620 (P.L.107-73) provides $1.3 billion for the revolving fund for FY2002.	NCSL supported funding, per May and June, 2001 letters, at the $1.3 billion level as states continue to capitalize their revolving loan funds. H.R.2620 provides $1.3 billion, level funding, for FY2002.
COLLECTIVE BARGAINING	H.R. 3061. A Senate amendment to H.R. 3061, an appropriations bill, would set federal collective bargaining standards for various state and local public safety and emergency workers. It would preempt any existing state or local collective bargaining agreement not meeting federal standards.	NCSL opposed this amendment in a November 6 letter. The amendment essentially failed when a Senate floor vote to limit debate on it fell four votes short of passage.
CRIMINAL ALIEN ASSISTANCE PROGRAM (SCAAP)	H.R.2500 (P.L.107-87). Provides states with funding to offset costs of incarcerating criminal aliens. The legislation contains $565 million, $300 million more than that sought by the administration and the Senate.	NCSL supported H.R. 2500 because it funds a greater portion of known state costs for criminal alien incarceration. NCSL letter sent July 24. The conference agreement on H.R.2500 gives SCAAP $565 million for FY2002.
DRINKING WATER STATE REVOLVING FUND	H.R. 2620 (P.L.107-73) and the president's FY2002 budget. H.R.2620 includes a 3% increase. The president's budget recommended $823 million, the same amount as appropriated for FY2001.	NCSL supported funding, per May and June, 2001 letters, at no less than the FY2001 amount as states continue to use these appropriations to capitalize their loan programs. H.R.2620 provides $850 million, a 3% increase.
EDUCATION REFORM	H.R. 1 (P.L. 107-110) and the president's February, 2002 outline. Would collapse several federal programs into 3-5 block grants, require annual testing of children in grades 3-8, increase the Reading First initiative, enhance funding for classroom technology and permit children in failing public schools to transfer to other public or charter schools.	In a March 12 letter, NCSL urged Congress and the president to consolidate similarly focused programs. The letter also urged congress to direct federal education dollars to states for accountability purposes, include a school construction program that respects state constitutional authority over education policy, give states adequate time to implement any significant federal accountability requirements and resist unfunded mandates regarding public school attendance. NCSL sent a letter to conferees on September 26 objecting to nine testing, annual progress, data collection and other preemption/unfunded mandate matters in both bills. H.R.1 signed into law on January 8, 2002.
ELECTRONIC COMMERCE -INTERNET TAX MORATORIUM	S. 245, S. 288, S. 777, S. 1567 would make the moratorium on state and local taxes on Internet access permanent and repeal the grandfather clause which protects the eleven states that were taxing Internet access in 1998. H.R. 1552 (P.L.107-75) extends the moratorium on Internet access and new, multiple and discriminatory taxes for two years (November 1, 2003) and preserves the grandfather clause. The original federal moratorium on Internet access taxes expired on October 21, 2001.	NCSL has opposed a permanent extension of the moratorium on state and local taxes on Internet access because Congress has failed to adequately define what Internet access means in a world of technology convergence and merging telecommunications industries. An early attempt to add an amendment to the Tax Relief Act to make the moratorium permanent was defeated in the Senate 88-11. NCSL was instrumental in facilitating the various industry groups to support compromise legislation extending the moratorium for two years and retaining the grandfather clause. H.R. 1552 was enacted with NCSL's support.
ELECTRONIC COMMERCE - SALES TAX COLLECTION	S. 512 and H.R. 1410 would grant states that simplify the authority to require all remote sellers to collect a state's sales and use taxes when at least 20 states had simplified their sales and use tax collection system. The legislation for the most part adopts the outline of NCSL's endorsed streamlined sales tax system and provides for the collection of the actual applicable state and local sales tax for each jurisdiction. S.1567 grants collection authority after 20 states has simplified, requires one-rate per state, establishes federal simplification standards and includes business activity tax language.	In the 106^th Congress, NCSL opposed similar legislation because it mandated one sales tax rate per state for remote commerce. In order to obtain NCSL's endorsement in the 107^th Congress, the sponsors accepted NCSL's language to collect the actual applicable state and local sales tax rate. NCSL supported this legislation. However, NCSL notified the sponsors that should the legislation be amended to go back to one sales tax rate, specify the extent of sales tax simplification or require states to address other tax issues such as nexus standards for business activity taxes or reform of telecommunications taxes, NCSL would vigorously oppose such a "compromise." After it became apparent that the Congress would only consider such legislation with a number of other unaccaptable federal conditions on state sales tax policy, NCSL was instrumental in forging an alliance of competing interests to support legislation giving the states sufficient time to finalize a sales tax simplification plan. NCSL supported H.R.1552 (see Electronic Commerce-Internet Tax Moratorium).
ENERGY APPROPRIATIONS	H.R. 2311 (P.L.107-66) and H.R.2217 (P.L.107-63). Provides funding for Energy/Water and Interior for FY2002. Includes increases for state weatherization grants and state energy grants, keeps funding for renewable energy programs at FY2001 levels and boosts funding for environmental cleanup and energy efficiency R&D. The administration recommended increases for weatherization and state energy grants and decreases for the others.	NCSL supported enhanced funding for weatherization and state energy grants, energy efficiency R&D, environmental cleanup and renewable energy programs. The conference agreement on H.R.2217 increases weatherization assistance by 50% ($230 million total) and state energy grants 18% ($45 million total). H.R. 2311 provides a 6% boost for renewable energy programs and $7.1 billion for environmental cleanup.
ESTATE TAX	H.R. 1836 (P.L.107-16). Incrementally repeals the federal estate tax over a 10-year period and repeals the state death tax credit in 2005. State death tax revenues are reduced 25% in FY2002, 50% in FY2003 and 75% in FY 2004.	NCSL took no position on the general tax reconciliation provisions, but did call for proportionate and equal reductions of both the federal estate tax and the state death tax credit. The law is estimated to cost states $65-$100 billion in future revenues (state death tax credits repealed within four years while the federal tax continues to 2011.
LEGAL IMMIGRANTS - BENEFITS RESTORATION	H.Con.Res 83 and the president's FY2002 budget. Neither provides any funds for restoration of food benefits to qualified legal immigrants, thus maintaining a five-year old cost shift to the states. Neither permits states to expand Medicaid or SCHIP to legal immigrant children and pregnant women.	NCSL supports restoration of food benefits to legal immigrants and also seeks optional authority for states to provide Medicaid and SCHIP to legal immigrants. NCSL's position was communicated to the president in a February 26 letter. The conference agreement on H.Con.Res. 83 was silent on restored food or optional health benefits for legal immigrants.
LIHEAP (LOW INCOME HOME ENERGY ASSISTANCE PROGRAM)	H.R.3061 (107-) and the president's FY2002 budget. The FY2002 budget resolution and the president's budget recommend funding at $1.4 billion., the same as FY2001. H.R.3061, S.1536 fund LIHEAP at $1.7 billion (plus $300 million in emergency assistance). H.R.2216 (P.L.107-20) provides $300 million in supplemental FY2001 LIHEAP funds.	NCSL supported funding levels up to $3.4 billion for LIHEAP. H.R. 3061 contains $1.7 billion, a 21% increase plus $300 million in emergency assistance. Signed into law on January 10, 2002. NCSL supported the $300 million supplemental appropriation for LIHEAP in a June 20, 2001 letter. These funds have yet to be released by the administration.
MEDICAID - FAMILY OPPORTUNITY ACT	H.Con.Res.83; S.321; H.R.600. The FY2002 budget resolution sets aside $7.9 billion over 10 years to implement S.321 and H.R.600., legislation giving states the option of expanding Medicaid for children with special needs. Families with disabled children could buy in to Medicaid coverage.	NCSL supported legislation giving states the option of expanding Medicaid coverage. The conference agreement on H.Con.Res 83 includes $7.9 billion for states opting to expand Medicaid for children with special needs through a Medicaid buy-in mechanism. No funding for this legislation provided for FY2002 and no legislation was considered.
MEDICAID - FLEXIBILITY	H.Con.Res.83. The Senate version of the FY2002 budget resolution contains $28 billion over three years to expand health insurance coverage to the uninsured through options and state flexibility.	NCSL supported state flexibility and Medicaid options such as those included in the conference agreement on H.Con.Res.83. No funding to expand health insurance coverage included in FY2002 appropriations bills.
MEDICAID - MANAGED CARE	HHS final rule. This regulation implements the Medicaid Managed Care provisions of the 1997 Balanced Budget Act.	NCSL supported revisions to the rule to provide flexibility to state Medicaid programs. NCSL also supported a delay in implementation of rule pending action on patients' bill of rights (pbr) legislation - legislation that would apply pbr standards to Medicaid.
MEDICAID - PSYCHIATRIC RESIDENTIAL TREATMENT FACILITIES	An HHS interim final rule establishes Medicaid standards for the use of seclusion and restraint on individuals under 21 years of age who reside in inpatient psychiatric institutions (specifically includes institutions that are not hospitals).	NCSL supported revisions to the rule to address concerns expressed by some states with small residential facilities.
MEDICAL RECORDS PRIVACY	On April 12, President Bush let stand a final rule completed in the final weeks of the Clinton administration and required by HIPAA. The rule would protect health information originating from oral, written and electronic records. Health information is barred from use by ERISA plan employers for employment decisions.	NCSL encouraged preservation of state privacy protections exceeding those in the federal rule. These protections stand in the final rule. There remain concerns regarding the implementation of the requirements in the new rule.
PENSION REFORM	H.R.10; S.742; H.R. 1836 (P.L.107-16) Enhances portability in public pension plans, allows workers to take their deferred compensation and other savings to new jobs, clarifies tax treatment of benefits and contributions under government deferred compensation plans, and increases contribution limits for individual retirement accounts and pensions contributions.	NCSL supported both H.R.10 and S.742 and expressed this support in letters to the House, Senate and president in February, March and May. H.R.10 passed the House on May 2. Provisions in H.R. 10 and S.742 folded into H.R. 1836, tax reconciliation legislation.
SAFE AND STABLE FAMILIES	H.R.2873 (107-). Reauthorized the Promoting Safe and Stables Families Act. This mandatory entitlement program received a $200 million authorization increase, but the increase is discretionary, not mandatory. States are given an extra year to use unspent independent living program funds. H.R.3061 (P.L. 107-),FY2002 appropriations, contains a $70 million or 23% increase.	NCSL supported H.R.2873, including a $200 million increase in mandatory spending for this program. NCSL sought the same mandatory spending increase in H.R.3061, legislation ultimately boosting program funding by $70 million (23%). H.R.3061 signed into law on January 10, 2002. The president is expected to sign H.R.2873 on January 17.
SCHIP - FY 2002 FUNDING	H.Con.Res.83 and the president's FY2002 budget, H.R.3061 (P.L.107-). All recommended FY2002 funding at $3.1 billion, the authorized level.	NCSL supported funding at the authorized levels for this state-federal partnership. H.R. 3061 passed both houses in mid-December. Signed into law on January 10, 2002.
SCHIP - REGULATIONS	HHS final rule. Final regulations implementing the SCHIP provisions in the 1997 Balanced Budget Act are effective June 11, 2001.	NCSL supported revisions to the rule to provide greater flexibility to the states. NCSL further commented on the interim final rule on July 25 commending changes made regarding state flexibility, prior authorization and presumptive eligibility and encouraging further changes to provisions that exceed statutory authority. HHS regulations became effective on August 25, 2001.
SCHOOL CONSTRUCTION	Various bills introduced; also H.R. 1836 (P.L. 107-16) tax reconciliation legislation. Most would either initiate grant programs, make tax changes or institute tax credits, lift arbitrage restrictions, relax private activity bond restrictions, establish revolving funds or school construction banks for purposes of new construction and/or repair.	NCSL supported a multi-faceted approach including the establishment of a state revolving loan fund, lifting of arbitrage restrictions on school bonds and expanding the definition of private activity bonds to include school facilities. NCSL support is conditioned on recognition of state constitutional primacy regarding education matters and that any new budget or tax credit authority be left with state legislatures. The conference agreement on H.R. 1836 relaxes private activity bond restrictions and lifts arbitrage restrictions for school construction purposes, both supported by NCSL.
SOCIAL SERVICES BLOCK GRANT	H.Con.Res 83; the president's FY2002 budget; H.R.956; S.550, H.R.3061 (P.L.107-), S.1536. The Senate version of H.Con.Res. 83, H.R. 956 and S.550 recommend SSBG funding at $2.38 billion, the amount set in the 1996 federal welfare reform agreement. The president's FY2002 budget reduces SSBG funding by 1%. H.R.3061 funds SSBG at $1.7 billion.	NCSL has supported the federal welfare reform agreement and its recommended SSBG funding level of $2.38 billion. That amount was included in the Senate's budget resolution through an amendment made by Senator Bob Graham (D-Florida). NCSL has written both the Congress and the president several times in support of full SSBG funding. H.R. 3061 passed both houses at $1.7 billion, a 1% decrease. H.R.3061 also preserves a 10% transfer of TANF to SSBG. Signed into law on January 10, 2002.
SPECIAL EDUCATION	H.Con.Res 83; the president's FY2002 budget, H.R.1 (P.L107-110), S.1., H.R.3061, All would increase annual funding for Part B of the Individuals with Disabilities Education Act (IDEA). The Senate version of H.Con.Res 83 adds $70 billion over 10 years for IDEA while the President's budget adds $1 billion for FY2002. S. 1 recommends federal funding of 40 percent of Part B expenditures achieved incrementally through $2 billion per year increases. H.R.3061increases IDEA funding by $896 million or 12%.	NCSL continued to demand that the federal government honor its commitment to fund 40% (currently around 15%) of the Average Per Pupil Expenditure for Part B of IDEA (various letters sent in February, March and April). The conference agreement on H.Con.Res. 83 in conference committee assumes a $1 billion increase in funding for IDEA. S.1 includes a sense of the Senate to support 40% funding. Conference committee efforts to guarantee mandatory spending for IDEA failed on H.R. 1. H.R.3061 contains a 12% or $896 million increase for IDEA part B. The President signed H.R.1 on January 8, 2002.
STATE BANK EXAM FEES	The president's FY2002 budget. Would impose a new fee on federally conducted examinations of state-chartered banks, while exempting national banks from the same.	NCSL opposed this recommendation in an April 4 letter to the Senate. Both the House and Senate versions of H.Con.Res 83, the FY2002 budget resolution, rejected the president's recommendation. While NCSL was successful for the eighth time in defeating this proposal, it is expected to be part of a legislative package reforming the Federal Deposit Insurance Corporation to be introduced in 2002.
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) BLOCK GRANT	H.Con.Res 83, the president's FY2002 budget, H.R.3061 (P.L.107-), S.1536. Would fully fund TANF at the authorized levels. H.R.3061 restores TANF transferability to SSBG at 10% S.1536 suggests 5.9%transferability. Current law is 4.5% transferability.	NCSL supported full continued funding of TANF and 10% transferability and communicated that in letters to the president in February. On May 25, NCSL wrote Congress urging rejection of any proposals to earmark or set aside TANF funds for specific purposes compromising state program flexibility. H.R.3061 contains full funding for TANF, the 10% transferability sought by NCSL and no earmarks. Signed into law on January 10, 2002.
TANF - SUPPLEMENTAL GRANTS	H.Con.Res.83 and the president's FY2002 budget, H.R.3061 (P.L.107-), S.942. H.Con.Res. 83 supports continuation of this program for one year at a cost of $319 million. S.942 reauthorizes the program for one year at $319 million.	NCSL supported the continuation of funding for TANF supplemental grants. Letters of support were sent several times. The conference agreement on H.Con.Res.83 included $319 million for TANF supplemental grants for FY2002. However, conferees on H.R. 3061 provided no funding for this program for FY2002.
TEA-21 TRANSPORTATION FUNDING	H.R. 2299 (P.L.107-87), H.Con.Res.83 and the president's FY2002 budget. All would fund highway, mass transit and highway safety programs at the levels guaranteed in TEA-21 legislation. This represents a 7% increase.	NCSL supported full funding of transportation programs at levels guaranteed in TEA-21 legislation. This was communicated to the president and congressional leaders in February letters. H.R.2299 provides full guaranteed funding for TEA-21, or a 7% increase. However, $650 million of $4.5 billion in excess trust fund revenues (RABA) were diverted away from the state highway program to special projects.
TOBACCO - GRAY MARKET	The U.S. Treasury Department has issued a proposed rule, per 2000 federal legislation, that prohibits tobacco products labeled for exportation from domestic sale subsequent to reimportation unless they are removed from their export packaging and repackaged.	NCSL and states had until May 25, 2001 to comment.