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APRIL 2008 UPDATE

OFFICE OF GOVERNMENT RELATIONS
Legislation and Policy Report
April 2008

WASHINGTON, D. C.

The House of Representatives and Senate passed legislation – H.R. 493, Genetic Information Non-discrimination Act - to bar genetic discrimination by employers and insurance companies. The Senate was expected to begin consideration of a reauthorization of the Federal Aviation Administration, H.R. 2881, and legislation to reauthorize the National Flood Insurance Program, S. 2284.

Budget and Appropriations:

FY2008 Supplemental Budget Bill – The FY08 supplemental appropriations bill is being drafted by House leadership. The legislation will fund the wars in Iraq and Afghanistan, which will include the President’s request of $102 billion, along with a $70 billion “bridge fund” for the wars in FY09. It has been reported that leaders are now “looking to add $3 to $4 billion in domestic spending beyond economic stimulus and troop-related funds.” This would be in addition to about $12 billion that is expected to be added to extend unemployment benefits and increase funding for GI education.

House Democratic leaders are likely to take the measure directly to the floor, bypassing mark-up in the House Appropriations Committee “to speed consideration of the bill and prevent it from being loaded with amendments.” The goal is to pass the bill in time for the Senate to act and President Bush to sign it before the Memorial Day recess. Republicans on the House Appropriations Committee strongly oppose bypassing Committee mark-up and suggest that they could disrupt floor action on the bill by offering motions to adjourn and other procedural motions.

Reports continue to circulate that among possible areas for additional domestic spending is $350 million for science along with federal parks, lands damaged in recent storms, and local law enforcement grants. The bill may carry economic stimulus measures, such as infrastructure spending and unemployment insurance. A broad coalition of the academic, business and association communities is working to urge the President and House and Senate leaders to support including additional science funding for the National Science Foundation (NSF), Department of Energy Office of Science (DOE OS), and the National Institute for Standards and Technology (NIST). These additional dollars would prevent layoffs of scientific and technical personnel at several DOE and university laboratories and help sustain the nation’s competitiveness agenda.

Senate Majority Leader Harry Reid (D-NV) has held meetings with Democratic appropriators to discuss a Senate strategy for the supplemental. Among proposals being considered are to increase education benefits for veterans and mandate longer periods between troop deployment. Recent reports indicate that the Senate Appropriations Committee is considering adding $24 billion in domestic spending, although information is incomplete as to where the additional dollars would be directed. Possible additions mentioned include local law enforcement grants, infrastructure projects, a world food program and wildfire suppression programs.

Meanwhile, at a hearing of the Senate Appropriations Subcommittee on State and Foreign Operations, Senator Lamar Alexander (R-TN) focused on one aspect of the problem: that the FY08 omnibus funding bill provided none of the $160 million requested by the Administration for the US portion of the International Thermonuclear Experimental Reactor (ITER). He reminded Administration officials at the hearing that failure to provide the agreed-on US funding for this international fusion energy project could result in a penalty to the US government of $750 million.

FY2009 budget – An agreement on the FY09 budget resolution may be reached during the first two weeks in May. House Budget Committee Chairman John Spratt (D-SC) commented to Congress Daily that negotiators have worked out most issues. The most outstanding item to be resolved is total spending level for non-Defense discretionary spending, where the House and Senate are about $3 billion apart.

Department of Defense:

The Senate Armed Services Committee included additional innovation and research funding in its April 30 mark-up of the FY2009 Defense authorization bill. According to reports, the measure increases authorized funding for Defense Science and Technology by nearly $400 million to more than $11.8 billion. The measure not only “fully supports” the Secretary of Defense’s initiative to increase funding for Defense basic research, but authorizes nearly $50 million over the FY09 request. While there is no guarantee that increased funding will be included in the FY09 Defense appropriations bill, Defense appropriators frequently use the authorization as a guide. The House Armed Services Committee begins its mark-up of Defense reauthorization during the first week in May; and, Defense appropriators are not expected to move until June at the earliest.

Department of Energy:

The Department of Energy (DOE) Office of Science is seeking proposals for Energy Frontier Research Centers under a new program targeted at speeding scientific breakthroughs needed for advanced energy technologies. Awards for this first group of centers are likely to be in the range of $2-$5 million a year for an initial five year period. Approximately $100 million will be available for the new centers program in FY2009. The competition is open to universities, DOE laboratories, and other institutions.

Higher Education:

Student loans – The House passed the “Ensuring Continued Access to Student Loans Act of 2008” (H.R. 5715), which would increase borrowing limits for federal graduate and undergraduate student loans. The legislation aims to ensure that students and families have greater access to low-cost federal student loans even if the turmoil in national credit markets leads to more expensive and harder-to-obtain private loans. The measure, which includes an amendment added by the Senate when it passed the bill by voice vote, now goes to President Bush, who will sign it.

The bill would increase annual loan limits for dependent and independent undergraduates by $2,000. For dependent students, the limits would be increased to:

$5,500 for first year students;
$6,500 for second year students; and
$7,500 each year for the final two years.

The bill would increase the aggregate borrowing limits for both subsidized and unsubsidized loans from $23,000 to $31,000 for dependent undergraduates and from $46,000 to $57,500 for independent undergraduates. For graduate students the legislation would increase the annual borrowing limit for unsubsidized loans from $12,000 to $14,000.

The legislation would make other changes to federal student loan programs. It would give parent borrowers participating in the PLUS program the option to defer repayment up to six months after their children leave college. It would give the Secretary of Education the authority to advance federal funds to loan guaranty agencies operating as lenders-of-last-resort in the event they lack sufficient capital to originate new loans. The bill would allow guaranty agencies to function as lenders-of-last resort on a school-wide basis.

During the floor debate an amendment by Representatives Mike Castle (R-DE) and Peter Welch (D-VT) that requires the Government Accountability Office to conduct a study on the impact of raising borrowing limits on tuition, fees, room, board, and private borrowing was approved.

The amended bill expands eligibility for the Academic Competitiveness Grant (ACG) and SMART Grant programs, and includes added regulatory requirements for the new lending authorities authorized by the bill.

A comprehensive summary of the final bill is available from the National Association of Student Financial Aid Administrators: http://www.nasfaa.org/publications/2008/ln5715summary051508.html

The Department of Education has issued a “Dear Colleague” letter announcing an increase in the combined aggregate Stafford loan limit for certain health professions’ students, including medical students, from $189,125 to $224,000 effective immediately. The increase is limited to unsubsidized Stafford loans and will allow medical students to borrow at a 6.8 percent interest rate, avoiding higher rates available through GradPLUS and other private loan programs.

Proposal for international student learning outcomes – The six presidentially based higher education associations in Washington have sent comments to the Organisation of Economic Cooperation and Development (OECD) expressing reservations about the OECD proposal to assess student learning outcomes on an international scale. OECD officials hope to develop a way to measure skills and abilities of graduates as a means of determining if and how higher education systems are meeting expectations of quality. The organization is moving ahead with a feasibility study, following meetings with groups of experts.
The associations’ letter outlined a number of considerations for the study, including the difficulty of measuring student learning across institutions with different goals, missions, and resources. They expressed concerns that results could be used to penalize institutions and to create another institutional ranking system. The letter was sent by the American Council on Education (ACE) on behalf of the Association of American Universities, the National Association of State Universities and Land Grant Colleges, National Association of Independent Colleges and Universities, American Association of Community Colleges, and the American Association of State Colleges and Universities.

Graduate students’ collective bargaining rights – Sen. Edward Kennedy (D-MA) and Rep. George Miller (D-CA) introduced legislation on April 17 that would give graduate students at private colleges and universities the right to bargain collectively. The “Teaching and Research Assistant Collective Bargaining Rights Act of 2008“ (S. 2891, H.R. 5838) effectively would overturn the 2004 decision by the National Labor Relations Board (NLRB) in the Brown University case, which held that graduate students are students and not employees of their universities. The NLRB, in essence, determined that the relationship between schools and graduate student assistants who perform services in connection with their degree programs is predominantly academic rather than economic.

The bill would change the definition of “employee” to include graduate students who receive funding as teaching and research assistants. If the change is enacted graduate students would be considered employees with the right to organize and bargain collectively under the National Labor Relations Act.

Higher Education Act reauthorization – The Senate passed another short-term extension (through May 31) of the Higher Education Act but the House failed to do so, with the act now expired. House Democratic leaders sought to move the one-month extension under unanimous consent on April 30, but House Republican Leader John Boehner (R-OH) objected. House Majority Leader Steny Hoyer (D-MD) has said the extension will clear during the first week in May, which should forestall any negative consequences from expiration of the authorization bill.

Meanwhile House and Senate negotiators continue to work out a final reauthorization package. It has been reported that a major sticking point is House negotiators’ continuing insistence on a provision that would penalize states if they reduced their higher education spending. State government officials oppose this requirement because it would prevent them from including higher education when budget cuts are necessary for balancing their budgets. They also warn that the provision would reduce their willingness to add funds to higher education in good economic times, when they might otherwise provide extra funding.

Homeland Security:

The Department of Homeland Security (DHS) released an interim final rule that will extend the period for Optional Practical Training (OPT) for certain foreign students from 12 to 29 months. The extension will be available to F-1 non-immigrant students who have completed a degree in science, technology, engineering, or mathematics and have accepted employment with an employer enrolled in the E-Verify employment verification program. The OPT extension will not apply to students in other disciplines.

The interim final rule also addresses a situation commonly known as the “cap gap,” in which students’ work authorizations expire before they can obtain their H-1B visas. Under the interim final rule, a student’s OPT status will be extended automatically if that student’s H-1B petition has been approved by US Citizenship and Immigration Services. There usually is a five-month gap between the expiration of a student’s OPT status and the beginning of the student’s H-1B status, so the automatic extension in the interim final rule will allow students to continue to work in the US until their H-1B petitions take effect.

NASA:

The successful return of the shuttle Endeavour in late March capped a global effort by NASA and its partners to push the International Space Station (ISS) toward completion. The agency is expected to launch 10 more shuttle flights through 2010 to complete ISS construction before the agency retires its aging, three-orbiter fleet. An additional flight is planned in August to overhaul the Hubble Space Telescope.

National Institutes of Health:

Open access policy – The National Institutes of Health (NIH) published a notice in the Federal Register on March 25 that formally requests comments on implementation of the agency’s open-access policy. Comments are due by May 31, 2008 and NIH is expected to summarize and respond to the comments in September.

The policy, which was enacted as part of the FY08 omnibus appropriations act, went into effect on April 7. It requires those who publish research partly or fully funded by NIH to provide a copy of the manuscript to NIH for posting on its PubMed Central public repository within 12 months of its acceptance for publication. Additional information about the policy is available on the NIH website.

Patent Reform:

Senate Judiciary Committee leaders continue to consider changes in the committee-passed patent reform bill (S. 1145) in an effort to gain the widest possible support before taking the measure to the Senate floor. The panel approved its bill on January 24, 2008 but Committee Chairman Patrick Leahy (D-VT) and ranking member Arlen Specter (R-PA) have continued to work with various sectors to resolve additional issues. Committee staff is working to develop compromises on several issues that would be incorporated into a manager’s amendment, but several thorny issues remain unresolved.

Research:

An advisory committee to the Secretary of the Department of Health and Human Services has issued a report on the oversight of genetic testing, including related federal, state, and private-sector activities. The Committee’s report recommends enhancements in five areas: a) regulations on clinical laboratory quality; b) clinical validity of and appropriate use of genetic tests; c) transparency of clinical testing; d) gaps in knowledge of the usefulness and impact of genetic tests; and e) education, training and tools to help the health care community, patients and consumers to interpret and communicate genetic test results. The report also urges greater coordination across government agencies and between public and private sector oversight activities. The Committee also noted the increasing difficulty in distinguishing between genetic and other complex laboratory tests, and therefore, applies several of its recommendations to lab tests generally. For additional information: http://www4.od.nih.gov/oba/SACGHS/reports/SACGHS_oversight_report.pdf

Taxes:

The House of Representatives was expected to consider a bill to simplify the federal tax code (H.R. 5719), including a provision that would ease the tax treatment of employer-provided cell phones and PDA’s. House Republicans are expected to seek procedural votes on a measure to extend President Bush’s tax cuts permanently.

Tax provisions affecting universities – Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) introduced a bipartisan bill (S. 2886) that contains numerous extensions of existing and expired tax breaks. Included in the bill are three provisions of particular interest to research universities. The legislation would extend the qualified tuition deduction, IRA charitable rollover, and the research and development tax credit. These three provisions expired on December 31, 2007 and would be reinstated retroactively for 2008 if the bill is enacted.

The “extenders” bill contains many other provisions including a “patch” for the alternative minimum tax. Based on previous estimates of the provisions in the bill, the measure will carry a price tag of approximately $100 billion, but it does not include offsets. House Democrats continue to press for “pay-go” budgeting rules, which would require revenue increases or spending cuts to offset the costs of the legislation. A Finance Committee mark-up of the bill is expected in May but has not been scheduled.

Meanwhile, the House Ways & Means Subcommittee on Select Revenue Measures held a hearing to examine how taxpayers are using higher education tax incentives, specifically the HOPE Credit, the Lifetime Learning Credit, and the deduction for tuition and fees. The panel addressed legislation (H.R. 2458) sponsored by Representatives Rahm Emanuel (D-IL) and Dave Camp (R-MI) that would consolidate the three tax incentives into a single, easier-to-use tax credit.

Odds and Ends:

False Claims Legislation – There is concern among the academic and research community that the False Claims Correction Act of 2007 (S. 2041), which the panel marked up on April 3, would have negative and unintended consequences for colleges and universities.

Competitiveness – The National Academies of Science sponsored a convocation on April 29 as a “Gathering Storm” follow-up activity. The purpose of the meeting was to take stock of developments since publication of the report – such as, enactment of the America COMPETES Act – and, to “strengthen engagement among the various stakeholders seeking to renew American innovation and explore how progress can be sustained and accelerated.”

In other activity the Brookings Institute and the Information Technology & Innovation Foundation have issued a report that urges the federal government to create a National Innovation Foundation (NIF) to advance national innovation and innovation policy. The new foundation, which could function similarly to the National Science Foundation, or a “government related public corporation within the National Institute of Standards and Technology,” would consolidate innovation policy efforts scattered throughout the government and bridge the gap between basic research and the introduction of new products and processes. The agency could use a variety of competitive grant programs to promote industry-university research consortia, regional industry clusters, and other collaborations at the national, state and regional levels.

Small Business legislation – The House approved H.R. 5819, Small Business Innovation Research/Small Business Technology Transfer Program Reauthorization Act, without the increase in the set-aside for small business research at major federal research agencies that had raised strong opposition from several sources including the White House, House Appropriations Committee Chairman David Obey (D-WI) and university organizations.

President Campaigns: Chad Holliday, CEO of DuPont and chair of the Council on Competitiveness, and President Graham Spanier of Pennsylvania State University co-authored an op-ed that appeared in the Philadelphia Inquirer on April 11. The column argued that supporters of science should focus on the presidential campaign as a vehicle for gaining needed political support for science and research. The piece highlights efforts to encourage the presidential candidates to discuss their positions on science and technology issues, including the “Science and Technology in the 2008 Presidential Elections” website, which is sponsored by the American Association of Universities, American Association for the Advancement of Science, and the Richard Lounsbery Foundation.

Comings and Goings:

Alan Stern, Director of NASA’s Science Mission Directorate, abruptly resigned in late March. His replacement is Edward Weiler, who had been serving as Goddard Research Center’s director and is a former NASA headquarters administrator.

THE BUCKEYE STATE

The General Assembly is expected to complete work and begin its summer recess by Memorial Day. There are several legislative priorities that need to be completed including the FY2009-2010 Biennial Capital Budget bill, legislation to enact the Governor’s economic stimulus package, and an operating budget corrections bill, among others.

Economic Stimulus Package – Governor Ted Strickland, Senate President Bill Harris, and House Speaker Jon Husted announced a bi-partisan plan to revitalize Ohio’s sagging economy. The plan was based on the Governor’s “Building Ohio Jobs” program that was proposed for the November 2008 ballot requesting voters to approve a $1.7 billion bond package. The new plan is reduced to $1.5 billion with only $400 million funding Clean Ohio projects needed to be approved by the voters at the polls. The remainder $1.3 billion will be appropriated in legislation in the next several weeks.

The plan proposes to increase business growth and add 57,000 jobs in Ohio through investment in “New and Emerging Industries,” “Infrastructure,” and “Workforce Development.” Higher education may apply for funds within all areas of investment and has a carve-out in the Higher Education Workforce Initiative provision of the plan. The program will be funded at $250 million over a five-year period. It targets retention of college graduates and creates a new cooperative education programs. The stimulus package includes:

$50 million – Bio-based Products – production of polymers, plastics and other materials from Ohio-grown crops.
$100 million – Biomedical
$150 million – Advanced Renewable Energy
$100 million – Logistics/Distributions
$400 million – Local Infrastructure
$200 million – Clean Ohio Conservation
$200 million – Clean Ohio Revitalization – brownfields clean-up
$120 million – Historic Preservation Tax Credit
$250 million – Higher Education Workforce Initiative

Funding for some programs within the package will come from Ohio Turnpike revenue and redirected funds from the Smoking Cessation program established with a portion of dollars from the Master Tobacco Settlement.

The Governor has emphasized that the stimulus package complements and does not take away from the Third Frontier Program. Lt. Governor Lee Fisher has indicated that the Administration is considering how it will address and structure the next phase of Third Frontier, including its name. No timeline has been provided.

Higher Education – State Strategic Plan:

Chancellor Eric Fingerhut released his strategic plan for higher education in Ohio on March 31. The report calls for action by public and private, two-year and four-year colleges and universities and state government to create a better educated workforce for Ohio’s economic future by meeting three goals in the next ten years:

Increase the percentage of Ohioans who attend college and complete degrees.
Increase the percentage of these graduates who remain in Ohio to work.
Increase the number of out-of-staters who attend college in Ohio and remain after graduation.

A section of the report focuses on the state building a partnership with independent colleges in the following areas:

“Consensus reforms” in state student financial aid programs;
Major reforms in institutional and program authorization process;
Adult learning partnerships for on-campus programs at community colleges;
Increasing the number of degrees award to transfer students from the public, two-year college sector; and
Support for research, whether it occurs on a public or private university campus.

A copy of the full report is available at: http://universitysystem.ohio.gov/pdfs/strategicPlan/USOStrategicPlan.pdf

Legislation:

S.B. 221, Electricity prices and electricity sources – The Ohio General Assembly and Governor Strickland came to agreement on a final version of S.B. 221 in April. The process for enacting the legislation, introduced last fall, took much longer than the Governor had expected. His goal was to complete action on the bill by December 31, 2007 but the process continued for nearly four additional months.

The bill was aimed at protecting consumers from skyrocketing electric bills when Ohio moved to full deregulation as planned on January 1, 2009. The final version of the legislation protects consumers and repairs Ohio’s national image as a state where electric rates could soar out of control. The bill is expected to lay the groundwork for creation of a new manufacturing industry in Ohio – renewable energy.

The Governor’s goal was to protect consumers from rate spikes when the current rate plans end in December. It is expected that users are not likely to pay less than currently and could pay higher rates due to the rising prices of coal, uranium and natural gas, which are the fuels for power plants. And, the manufacturing industry wanted to retain the ability to purchase electricity from outside power companies and to negotiate discount prices. In the renewable energy area the bill mandates that 12.5 percent of the power sold in Ohio come from renewable technologies by 2025 and includes a year-by-year benchmark that must be met. There is some concern that the bill language on this issue allows the Public Utilities Commission of Ohio (PUCO) to give a utility a pass on the goal itself if the wind farms and solar fields increase overall rates by more than 3 percent. It has been reported that the bill language is unclear and that PUCO will be the final arbiter. Utilities will be required to demonstrate (over the next 17 years) that it has helped customers reduce power consumption by a total of 22 percent.

Vaccination Bill - Senator Gary Cates (R-4) is sponsoring a bill that will require students living in on-campus housing at all institutions of higher education – public and private – to be vaccinated for meningitis and Hepatitis B. The requirement may be waived if the student (if older than 17), or the student’s parents, signs a waiver form citing religious or medical reasons. Sen. Cates gave sponsor testimony during the first hearing of the legislation.

H.B. 53, Mandatory Sick Days - This bill is a mandatory sick days initiative introduced by initiative (labor unions) and supported by Ohioans for Healthy Families, a coalition of many health organizations and metropolitan city councils. The bill received a hearing in the House Commerce and Labor Committee.

The bill was proposed “by initiative.” An initiative petition proposing a law, as opposed to a constitutional amendment, must contain signatures of electors equal to three percent of the total votes cast in the last election for governor. The petition must be filed with the Secretary of State (SOS) at least ten days before a session of the General Assembly begins and the SOS must transmit the petition to the General Assembly as soon as it convenes. If the General Assembly does not enact the proposal within four months, fails to pass the proposal, or passes an amended version, the proponents have 90 days to collect additional signatures for inclusion on the November ballot. The four-month deadline for this initiative is May 9, 2008.

H.B. 350, Student Poll Workers – The bill was passed by the House early in the month and has moved to the Senate, where hearings have begun. The legislation, sponsored by Rep. Larry Wolpert (R-23) permits college students to work as election officials in the precinct in which they attend school and allows up to two high school students per polling location.

S.B. 174 – Anti-cloning Legislation - S. B. 174 is sponsored by Senator Stephen Buehrer (R-01) and was introduced in early 2007. Assigned to the Judiciary-Civil Justice Committee chaired by Senator David Goodman (R-Columbus), the bill had been dormant until early April. The bill prohibits human cloning and criminalizes research associated with any cloning for research.

Sources of information for this report include the Association of American Universities, American Institute of Physics, the Chronicle of Higher Education, the Association of Independent Colleges and Universities of Ohio’s updates and reports, newspapers, political and legislative wire services, and others.