On February 20, 2003, the President signed into law the Consolidated Appropriations Act forFY2003, P.L. 108-7 , formerly H.J.Res. 2 The Act consolidates under one omnibusappropriations measure 11 appropriations acts, including the District of Columbia AppropriationsAct for FY2003, that the 107th Congress failed to complete action on before it adjourned. OnFebruary 13, 2003, the House and Senate approved the conference report ( H.Rept. 108-10 ) accompanying H.J.Res. 2 . The Senate approved its version of H.J.Res. 2 on January 23, 2003. A few weeks earlier, on January 8, 2003, the House approved its initialversion of H.J.Res. 2 , extending until January 31, 2003, P.L. 107-229 , a continuingappropriations measure that froze at the FY2002 approved funding level appropriations for 11 ofthe 13 appropriations bill for FY2003 that had not yet been approved by Congress, including theDistrict of Columbia Appropriations Act for FY2003. The House version of the bill included aprovision that would have allowed the District of Columbia to spend $5.8 billion in locally raisedfunds while Congress completed action on the proposed $517 million in federal contributions to theDistrict's FY2003 budget. On November 13, 2002, Congress passed H.J.Res. 124 , acontinuing resolution extending until January 11, 2003, P.L. 107-229 , a continuing appropriationsmeasure. The measure effectively postponed further congressional consideration of District ofColumbia appropriations bill until the start of the 108th Congress. Table 1. Status of District of Columbia Appropriations: FY2003 (1) The 107th Congressadjourned without the House or Senate passing their respective versions of the District ofColumbia Appropriations Act for FY2003 (H.R. 5521 or S. 2809). The108th Congress consideredthe FY2003 appropriations for the District of Columbia as a part of an omnibus appropriations bill (H.J.Res. 2)which the Senate amended and passed on January 23, 2003. Since the phaseout of the District of Columbia Financial Responsibility andManagement Assistance Authority (the Authority) (1) in September 2001, and thesigning of the District of Columbia Appropriations Act for FY2002, P.L. 107-96 , onDecember 21, 2001, the District of Columbia government has continued to makeprogress in improving the delivery of services and in the city's long-term financialhealth; however, issues remain. Most notably, the city faced a projected budgetshortfall of $323 million for FY2003, if corrective action was not taken. The CFO'sComprehensive Annual Financial Report (CAFR), released in January 28, 2002,certified that the city had achieved a $77.6 million budget surplus for FY2001,resulting in an accumulated General Fund balance of $526 million. This achievementmarks the city's fifth consecutive year of balanced or surplus budgets. However, thesignificance of this achievement has been eroded by the city's projected fiscalimbalance of $323 million. During the last year, the District of Columbia's elected and appointed leadership addressed a number of other governance-related issues, including school reform andmedical services for the uninsured. School reform, according to observers, is a work-in-progress. The new Boardof Education also had to address a $40 million budgetdeficit and issues surrounding special education services and the certification ofcharter schools. The downsizing of D.C. General Hospital and the creation of analternative health care delivery system for the city's poor residents was, andcontinues to be, a contentious political issue. The financial crisis facing the city'slead provider of health care for the city's indigent population, Greater SoutheastCommunity Hospital, has raised concerns about the viability of the new system thatreplaced the city's public hospital, D.C. General. The District of Columbia Financial Responsibility and Management Assistance Act of 1995, P.L. 104-8 , created the Authority and the Office of Chief FinancialOfficer (OCFO). Under the law the CFO is charged with producing auditedstatements of the city's financial condition; preparing the city's annual budget;borrowing on behalf of the District; collecting receipts, payments, and transactionsfor the District; investing the city's funds; and administering and enforcing tax laws. Working in concert, the District's elected political leadership, the presently dormantAuthority and the CFO implemented a series of financial and management reforms. The District ended FY1997 with a surplus of $186 million. For FY1998, the city's budget surplus was $445 million. (2) After a13-week delay, the city's CFO reported an FY1999 surplus of $135 million. For FY2000, the general fund surpluswas $241 million, and for FY2001, $77.6 million. (3) For FY2003, the city faced a projected budget shortfall of $323 millionaccording to the CFO. (4) The shortfall has requiredsignificant reductions in cityservices including education and human services. On September 17, 2002, the city'sCFO submitted revised budget estimates for FY2003 to FY2006, which included aprojected deficit of $323 million for FY2003. In response to the CFO's findings andat the urging of Congress, the mayor and the city council submitted a revised budgeton September 27, 2002, aimed at addressing the budget shortfall. The Office of the CFO has played a critical role in the city's success in maintaining budget discipline and its return to fiscal health. On January 28, 2002, theCFO released the city's Comprehensive Annual Financial Report (CAFR) forFY2001. The report, which is a critical barometer of the city's financial health,showed that it had a budget surplus of $77.6 million at the end of FY2001. TheFY2001 CAFR met the CFO's key objectives of producing an unqualified auditopinion and a balanced or surplus budget for the fifth consecutive year. In 2001, the city approved amendments to the D.C. Code making the OCFO a permanent part of the city's governing structure. Without such legislation or theintervention of Congress, the OCFO would have ceased operating on September 30, 2001, the end of the control period. (5) In July2001, a conference committeeconsidering supplemental appropriations for the District of Columbia for FY2001offered, but later withdrew, a proposal regarding the District's Chief FinancialOfficer. On June 19, 2001, the city council held a public hearing on the Independenceof the Chief Financial Officer Establishment Act of 2001, B14-0254. The legislation,which makes the position of CFO permanent; provides for the appointment andremoval of the CFO by the mayor, with the consent of the city council during a non-control year; and transfers tothe CFO the responsibility for the management of allexecutive branch agencies involved in managing the city's finances. The bill wasapproved by the Council by a voice vote on July 10, 2001 as legislative act 14-089. Reform of the city's health care delivery system for the poor continues to be a divisive political issue. During the past 2 years, the city's political leadership hasbecome bitterly divided over the downsizing of D.C. General Hospital, the demiseof the Public Benefit Corporation (PBC), and the restructuring of the city's healthcare delivery system for indigent and uninsured residents of the city. The downsizingand restructuring of the hospital from a 250-bed advance trauma center to acommunity access hospital that treats and releases or transfers patients within 23hours of admittance spawned a last minute challenge to the mayor's reelection bid. Reform in the city's delivery of health care to the poor was sought by Congress because of the PBC's mismanagement of D.C. General Hospital. From 1997 to itsdismantling in 2001, the PBC amassed $109 million in unbudgeted loans from thecity, using its power to borrow from the city's general fund to cover deficit spendingand defer mounting debt. In addition to these questionable financial managementpractices, the PBC had been the subject of newspaper stories detailing questionablehiring practices, including the hiring of friends and relatives of city council membersand former associates of the Executive Director of the PBC. The new system administered by the newly created Health Care Safety Net Administration, which was created with the passage of the Health Care PrivatizationAct of 2001 (D.C. Law 14-18) and replaced the PBC, began functioning on April 21,2001. It provides health care services to District residents with incomes that do notexceed 200% of the poverty level through the Health Care Alliance, a coalition ofhealth care providers headed by Greater Southeast Community Hospital, andincluding Chartered Health Plan, Unity Health Care, Children's National MedicalCenter, the George Washington University Hospital, and the District of ColumbiaDepartment of Health. Critics of the new plan complained that health care services to the poor would be severely curtailed, while supporters praised it as responsive and as an effectivemeans of widening the health care choices of the city's uninsured while reducing the cost of care. The effectiveness of the new system has been called into question bytwo recent revelations. First, Greater Southeast Community Hospital, the leadprovider of health care services to the city's indigent population, faces a financialcrisis caused, in some part, by security fraud involving the primary creditor to itsparent company. The hospital's weakened financial condition has resulted in acurtailing of services at the hospital and a resulting shift of demand for services toother hospitals. The hospital's weakened financial condition also provides newevidence for critics that the system of privatizing care is flawed. Second, an October 2, 2002 audit by the city's Inspector General found significant problems in the Department of Health's oversight of the city's contractwith the Health Care Alliance and the Health Care Alliances administration of theenrollment process. Specifically, the report noted that the Department of Health hadfailed to hire critical personnel in a timely fashion, and the Health Care alliance hadfailed to properly screen thousands of ineligible enrollees. The audit found that theAlliance rolls included individuals with unverified addresses and incomes, third partyinsurance, invalid social security numbers, and incomes exceeding enrollmentmaximums. Enrollment rules governing eligibility require enrollees to show proofof District residency, have incomes less than 200% of the poverty level, and have noother health coverage, including Medicaid. Supporters of the city's health careprivatization efforts contend that the system is superior to the one it replaced - D.C.General - the city's public hospital. On February 4, 2002, the Bush Administration released its FY2003 budget recommendations. The Administration's proposed budget included $378.8 millionin federal payments to the District of Columbia. (6) An overwhelming percentage ofthe President's proposed federal payments and assistance to the District involve thecourts and criminal justice system. This includes $161.9 million for the CourtServices and Offender Supervision Agency for the District of Columbia, anindependent federal agency that has assumed management responsibility for theDistrict's pretrial services, adult probation, and parole supervision functions. Inaddition, the Administration requested $159 million in support of court operations,and $32 million for Defender Services. These three functions (court operations,defender services, and offender supervision) represent $352.9 million, or 93.2% ofthe President's proposed $378.8 million in federal payments to the District ofColumbia (see Table 2). On June 4, 2002, District officials transmitted the city's $5.8 billion budget for FY2003 to the President for review and approval. On July 11, 2002, the BushAdministration transmitted the city's budget to Congress for its review and approval.The city's initial operating budget included a $70 million reserve fund. In addition,the District's budget would have decreased local funding for public education by $48million while seeking $23.2 million in special federal payments for charter schoolfinancing, early childhood education, and special education. The District's initialbudget also would have increased funding for human support services by $680million and for general government support by $42.6 million. On September 27, 2002, the District submitted an amended budget for FY2003, intended to address a $323 million projected deficit. The District's Fiscal Year 2003Budget Request Amendment Act, A14-46, would partially address the budget deficitby reducing total operating expenses by approximately 3.5%. The proposed reductions included government support activities (6.4%), economic developmentactivities (8.7%), public safety (3.5%), public education (3.4%) and human services(3.6%). The amended budget must be approved by Congress (see Table 3). TheDistrict of Columbia Appropriations Act for FY2003 is one of several appropriationsbills that the 107th Congress did not pass. It has been included in a series ofcontinuing appropriations. Section 302(a) of the Congressional Budget Act requires that the House and Senate pass a concurrent budget resolution establishing an aggregate spending ceiling(budget authority and outlays) for each fiscal year. These ceilings are used by Houseand Senate appropriators as a blueprint for allocating funds. Section 302(b) of theCongressional Budget Act of 1974 requires appropriations committees in the Houseand Senate to subdivide their Section 302(a) allocation of budget authority andoutlays among the 13 appropriations subcommittees. The House AppropriationsCommittee approved a Section 302(b) suballocation of $517 million in budgetauthority for FY2003 for the District of Columbia. Congress not only appropriates federal payments to the District to fund certain activities, but also reviews the District's entire budget, including the expenditure oflocal funds. The District subcommittees of both the House and Senate AppropriationsCommittees must approve--and may modify--the District's budget. House andSenate versions of the District budget are reconciled in a joint conference committeeand must be agreed to by the House and the Senate. After this final action, theDistrict's budget is forwarded to the President, who can sign it into law or veto it. 108th Congress. The 107thCongress was unable to complete action on 11 appropriations bills, including theDistrict of Columbia Appropriations Act for FY2003, before adjourning. The 108thCongress took up consideration of these bills in early January 2003, and eventualpassed a consolidated appropriation. In the interim Congress passed a series ofcontinuing budget resolutions aimed at providing temporary funding for affectprograms and activities. Table 2. District of Columbia General and Special Federal Payment Funds: Proposed FY2003 Appropriations (inmillions of dollars) a In previous years, funds would be provided as part of District of Columbia court operations. Congresscreated a separate appropriation to ensure payment of attorneys representing indigent persons, guardianship,and abused and neglected children in court proceedings. b Certified as a federal agency on August 14, 2000. c In FY2002 funds awarded under separate heading to the CFOfor a feasibility study of Eastern Marketrenovation. d FY2002 appropriations included $0.5 million forSoutheastern University and McKinley TechnologyCenter funding. e $5 million would be made available in FY2003 to fund thecrime lab activities only. Allows courts to reallocate not more than $1 million among activitiesfunded under this heading. f $0.5 million was appropriated to CFO in FY2002 for soccerfacilities at Kenilworth Park. g Funds administered under the CFO account. h Activity funded under Defender Services account. i Includes $16.4 million in unobligated balances from previousyear. j Funded under separate account for public charter schools. k Funded as an set aside under public school account House Version of H.J.Res. 2 (formerly H.R. 5521). On January 8, 2003, the Houseapproved a joint resolution, H.J.Res. 2 , extending P.L. 107-229 , throughJanuary 31, 2003. P.L. 107-229 , a continuing budget resolution, froze appropriationsfor 11 appropriations bills for FY2003 at their FY2002 budget levels. H.J.Res. 2 , was intended to serve as a vehicle for completing final fundingdecisions on the 11 remaining regular appropriations bills, including the District ofColumbia. Section 7 of H.J.Res. 2 , as approved by the House on January8, 2003, would have allowed the District to spend $5.8 billion in locally raised fundsfor operating expenses in accordance with the city's revised financial plan and budgetfor FY2003. Although city officials expressed support for the House provision thatwould have released that portion of the District of Columbia budget financed withlocally raised funds, the District's Delegate to Congress contended that the delay inapproving the city's budget argued for increased budget autonomy for the city inspending its own locally raised funds. During the 107th Congress, the House Appropriations Committee reported out its version of the District of Columbia Appropriations Act for FY2003, H.R. 5521 , on October 2, 2002, several days after the District submitted a revised budget forFY2003. The House bill included $517 million in special federal payments for theDistrict of Columbia. Like its Senate counterpart, the bill included $17 million for acollege tuition assistance plan, $15 million for security planning, and $154 million forcourt services and offender supervision. The House bill included $14 million in specialfederal payments to the D.C. public schools and $24 million for capital infrastructureprojects. The District requested $96 million for such activities. FY2003 General Provisions, House Bill. The House Appropriations Committee included a provision thatwould have removed the prohibition on the use of District funds for costs associatedwith implementing the District's Health Care Benefits Expansion Act of 1992. Theprovision was also included in the Senate version of the bill. Like its Senatecounterpart, the House bill retained a number of provisions that District officialswanted to eliminate or modify, including those related to medical marijuana, abortion,and needle exchange programs. Senate Version of H. J. Res. 2 (formerly S. 2809). On January 23, 2003. the Senate passed its versionof H. J. Res. 2, an omnibus appropriations measure that included the full-text of eachof the outstanding regular appropriations bills, as amended. The Senate bill included$512 million in special federal payments and earmarks for the District of Columbia. address the differences in House and Senate general provisions included the DistrictAppropriations Act. On July 26, 2002, the Senate Appropriations Committee reported S. 2809 , the District of Columbia Appropriations Act for FY2003. The bill included $517million in special federal payments and contributions to the District. The majority ofthe funds were slated to be used for courts, defender services, and offendersupervision-related activities. The Senate Appropriations Committee also included $15million for emergency planning and response activities, and an additional $15 millionfor capital infrastructure projects that support the creation of a unified communicationscenter to serve all D.C. first responders ($10 million) and a state-of- the-art forensiclaboratory ($5 million). The Committee also included $58 million for the AnacostiaWaterfront Initiative. Of this amount $5 million would be used to develop parks andrecreational facilities at Kenilworth Park and $50 million would be used to design andrebuild the water and sewer system that serves the nation's capital. These funds wereto be matched by local funds. The House bill did not include funding for the initiative. FY2003 General Provisions, Senate Bill. During its consideration of the bill, the Senate AppropriationsCommittee included a provision that would remove the prohibition on the use ofDistrict funds for costs associated with implementing the District's Health CareBenefits Expansion Act of 1992. The act allows a District employee to include acohabitating, but unrelated, person on the employee's health insurance plan. The actalso allows unrelated heterosexual and homosexual couples to register as domesticpartners. The Committee also would have reduced the number of general provisionsincluded in the bill to 36 from the 41 included in the FY2002 Appropriations Act. Itretained a number of provisions that District officials wanted eliminated or modified,including those related to medical marijuana, abortion, and needle exchange programs. Conference Version of H. J. Res. 2, P.L. 108-7. The 107th Congress adjourned without the House or Senate passingtheir respective versions of the District of Columbia Appropriations Act for FY2003( H.R. 5521 or S. 2809 ). The 108th Congress considered theFY2003 appropriations for the District of Columbia as a part of an omnibusappropriations bill ( H.J.Res. 2 ). The House originally introduced H.J.Res. 2 , on January 8, 2003, as a continuing budget resolutionproviding temporary funding for programs funded under 11 appropriations bills,including the District of Columbia Appropriations for FY2003, considered, but notpassed, during the 107th Congress. The Senate amended and passed its version of H.J. Res. 2, on January 23, 2003. P.L. 108-7, Special Federal Payments and Contributions. The conference version of H.J.Res. 2 , wasapproved by the House and Senate on February 13, 2002. The Act, which was signedby the President on February 20, 2003, appropriates $512 million in special federalpayments and contributions to the District of Columbia and associated public andprivate entities. The Act includes: $162 million for the operation of the District of Columbia Court system; $155 million for court services and offender supervision activities; $50 million federal payment to the Washington Water and Sewer Authority; $33 million for defender services; $30 million for security and emergency preparedness and response activities, including $15 million for security planningactivities; $20 million for public education, including $3 million in support of special education, and $17 million for the District's public charter schools; and $17 million for college tuition assistance plan. The Act also includes $40 million allocated to the CFO and earmarked for 56 public and private entities for specific projects and activities. P.L. 108-7, General Provisions. The Act, as passed by Congress, includes several provisions which city leaders sought tohave removed or modified characterizing the provisions as intrusive and anti-homerule. The Act prohibits the use of the use of federal and District funds for: lobbying for District statehood or voting representation in Congress; abortion services, except in the case of rape or incest; a needle or syringe exchange program intended to reduce the spread of AIDS/HIV; or legalize marijuana or the implementation of a medical marijuana initiative. The Act allows the District to continue to use local funds to implement the 1992 Health Care Benefits Expansion Act, which extends medical, employment, andgovernment benefits to unmarried couples, including homosexuals. The Act includesseveral provisions aimed at addressing public education issues in the District ofColumbia. In addition to appropriating a combined $20 million in special federalcontributions to the District of Columbia Public School System ($3) and public charterschools ($17 million), the Act includes language authorizing the establishment of theOffice of Public Charter School Financing and Support and the a new Charter SchoolFund. The Act also establishes a $4,000 ceiling payable to attorneys involved legalactions brought against the District of Columbia Public Schools under the Individualswith Disabilities Educations Act (20 U.S.C. 1400 et seq.). For additional backgroundon these and other key policy issues please see Key Policy Issues section of this report. Table 3. District of Columbia GeneralFunds (in millions of dollars) According to the city's CFO, the District faced a projected FY2003 budget deficit of $323 million. This revenue shortfall can, in part, be attributable to theresidual effects of the attacks of September 11, 2001, which reduced tourism,convention, and business travel income. Other factors such as a slowing economy,lower returns on investments, and overspending in such areas as public educationalso have contributed to the looming deficit. With a deadline of October 1, 2002, thestart of the 2003 fiscal year, city leaders, in order to avoid congressional interventionor the possible resurrection of the control board, developed an acceptable plan thatmay close the revenue and expenditure gap. City officials considered several options aimed at addressing the projected $323 million deficit. The mayor and city council considered action that would: reduce expenditures; increase taxes and fees; access the reserve fund; or any combination of the three. If city leaders had been unable to fashion a plan, the city faced the possibility that Congress would have intervened and made the cuts. According to press reportsat the time, , the most likely plan included significant cuts in the 10 agencies withthe largest budgets including education, health, and human services. (7) Cuts in theseareas would affect children and the poor. It could have also involved a significantreduction in the city's work force and the deferring of employee wage increases,planned capital expenditures or program increases. The city leadership asked unionsrepresenting city employees to temporarily put off raises built into their contracts forFY2003, which began October 1, 2002. The raises average about 4% with policeraises at 5%. According to estimates by the Williams administration, if the unionsagreed to a 4-month delay, for instance, it could save the city $8 million to $10million. (8) If the city had chosen tax and fee increases, the mostly likely targets were increases on alcohol, hotel, and tobacco. According to Jack Evans, chair of the citycouncil's Finance and Revenue Committee, increases in general sales or propertytaxes could prove politically unpopular, since city residents are among the mostheavily taxed in the nation. (9) The city also consideredrolling back planned incometax relief. Another option considered was the use of the city reserve funds. It should be noted that the District of Columbia Appropriations Act of 2002, P.L. 107-96 and theD.C. Code (ï¿½1-204.50a) require the District, when using reserve funds to close abudget gap in a given fiscal year, to replenish the fund the following fiscal year. Currently, the city's CFO projects annual budget deficits for the next 4 years that mayreach as much as $351 million in FY2006. (10) In addition to the $15 million earmarked for emergency planning and security, the city's budget includes additional emergency planning and homeland securityrelated funding. Specially, the city requested $22 million for a unifiedcommunications system for regional emergencies. The House bill includes $39.6million, including $19 million for a unified regional emergency communicationscenter. Table 4. Emergency Preparedness and Security Funding Whether to continue a needle exchange program funded with federal or District funds is one of several key policy issues that Congress considered when reviewingthe District's appropriations for FY2003. The controversy surrounding funding aneedle exchange program touches on issues of home rule, public health policy, andgovernment sanctioning and facilitating the use of illegal drugs. Proponents of aneedle exchange program contend that such programs reduce the spread of HIVamong illegal drug users by reducing the incidence of shared needles. Opponents ofthese efforts contend that such programs amount to government sanctioning of illegaldrugs by supplying drug-addicted persons with the tools to use them. In addition,they contend that public health concerns raised about the spread of AIDS and HIVthrough shared contaminated needles should be addressed through drug treatment andrehabilitation programs. Another view in the debate focused on the issue of homerule and the city's ability to use local funds to institute such programs free fromcongressional actions. The prohibition on the use of federal and District funds for a needle exchange program was first approved by Congress as Section 170 of the District of ColumbiaAppropriations Act for FY1999, P.L. 105-277 . The 1999 Act did allow privatefunding of needle exchange programs. The District of Columbia Appropriations Actfor FY2001, P.L. 106-522 , continued the prohibition on the use of federal andDistrict funds for a needle exchange program, and restricted where privately fundedneedle exchange activities could take place. Section 150 of the District of ColumbiaAppropriations Act for FY2001 made it unlawful to distribute any needle or syringefor the hypodermic injection of any illegal drug in any area in the city that is within1,000 feet of a public elementary or secondary school, including any public charterschool. The provision was deleted during congressional consideration and passageof the District of Columbia Appropriations Act of FY2002, P.L. 107-96 . The act alsoincluded a provision that allows the use of private funds for a needle exchangeprogram, but prohibits the use of both District and federal funds for such activities. Presently, only one entity, Prevention Works, a private nonprofit AIDS awarenessand education program, operates a privately funded needle exchange program. TheFY2002 District of Columbia Appropriations Act requires such entities to track andaccount for the use of public and private funds. District officials were seeking to lift the prohibition on the use of District funds for needle exchange programs. However, P.L. 108-7 , prohibits the use of bothDistrict and federal funds for needle exchange programs. The Act allows the use ofprivate funds for needle exchange programs and requires private and public entitiesaccount for these funds separately. The Senate version of the District'sAppropriations Act, S. 2809 , would have allowed the use of localgovernment funds for needle exchange programs, but would have maintained theprohibition on the use of federal funds. Like the final conference provision, the House bill, H.R. 5521 , prohibited the use of both District and federalfunds for a needle exchange program. The medical marijuana initiative provision in the District of Columbia appropriations legislation is another issue that engenders controversy. The Districtof Columbia Appropriations Act for FY1999, P.L. 105-277 , included a provision thatprohibited the city from counting ballots of a voter-approved initiative that wouldhave allowed the medical use of marijuana to assist persons suffering debilitatinghealth conditions and diseases including cancer and HIV infection. Congress's power to prohibit the counting of a medical marijuana ballot initiative was challenged in a suit filed by the D.C. Chapter of the American CivilLiberties Union (ACLU). On September 17, 1999, District Court Judge RichardRoberts ruled that Congress, despite its unique legislative responsibility for theDistrict under Article I, Section 8 of the Constitution, did not possess the power tostifle or prevent political speech, which included the ballot initiative. (11) This rulingallowed the city to tally the votes on the November 1998 ballot initiative. To preventthe implementation of the initiative, Congress had 30 days to pass a resolution ofdisapproval from the date the medical marijuana ballot initiative (Initiative 59) wascertified by the Board of Elections and Ethics. Language prohibiting theimplementation of the initiative was included in P.L. 106-113 , the District ofColumbia Appropriations Act for FY2000. Opponents of the provision contend thatit and similar actions undercut the concept of home rule. The District of Columbia Appropriations Act for FY2002, P.L. 107-96 , includes a provision that continues to prohibit the District government from implementing theinitiative. Congress' power to block the implementation of the initiative was againchallenged in the courts. On December 18, 2001, two groups, the Marijuana PolicyProject and Medical Marijuana Initiative Committee, filed suit in U.S. District Court,seeking injunctive relief in an effort to put a medical marijuana initiative on theNovember 2002 ballot. The District's Board of Elections and Ethics ruled that acongressional rider that has been included in the general provisions of each Districtappropriation act since 1998 prohibits it from using public funds to do preliminarywork that would put the initiative on the ballot. On March 28, 2002, a U.S. District Court judge ruled that the congressional ban on the use of public funds to put such a ballot initiative before the voters wasunconstitutional. (12) The judge stated that the effectof the amendment was to restrictthe plaintiff's First Amendment rights to engage in political speech. The decision wasappealed by the Justice Department and on September 19, 2002, the U.S. Court ofAppeals for the District of Columbia Circuit reversed the ruling of the lower courtwithout comment. The three-judge Appeals Court panel stated its decision would befully explained in an opinion to be issued at a later date. The Appeals Court notedthat it issued its ruling on September 19, 2002, because that was the deadline forprinting ballots of the November general election. Consistent with provisions included in H.R. 5521 and S. 2809 , P.L. 108-7 includes a provision that continues the prohibitionagainst the implementation of the medical marijuana ballot initiative. The public funding of abortion services for District of Columbia residents is a perennial issue debated by Congress during its annual deliberations on District ofColumbia appropriations. District officials cite the prohibition on the use of Districtfunds as another example of congressional intrusion into local matters. The Districtof Columbia Appropriations Act for FY2002, P.L. 107-96 , included a provisionprohibiting the use of federal or District funds for abortion services, except in caseswhere the life of the mother is endangered or the pregnancy is the result of rape orincest. This prohibition has been in place since 1995, when Congress approved theDistrict of Columbia Appropriations Act for FY1996, P.L. 104-134 . Since 1979, with the passage of the District of Columbia Appropriations Act of 1980, P.L. 96-93 , Congress has placed some limitation or prohibition on the use ofpublic funds for abortion services for District residents. From 1979 to 1988,Congress restricted the use of federal funds for abortion services to cases where themother's life would be endangered or the pregnancy resulted from rape and incest. The District was free to use District funds for abortion services. When Congress passed the District of Columbia Appropriations Act for FY1989, P.L. 100-462 , it restricted the use of District and federal funds for abortion servicesto cases where the mother's life would be endangered if the pregnancy was taken toterm. The inclusion of District funds, and the elimination of rape or incest asqualifying conditions for public funding of abortion services, was endorsed byPresident Reagan, who threatened to veto the District's appropriations act if theabortion provision was not modified. (13) In 1989,President Bush twice vetoed theDistrict's FY1990 appropriations act over the abortion issue. He signed P.L. 101-168 after insisting that Congress include language prohibiting the use of District revenuesto pay for abortion services except in cases where the mother's life was endangered. (14) The District successfully fought for the removal of the provision limiting District funding of abortion services when Congress considered and passed theDistrict of Columbia Appropriations Act for FY1994, P.L. 103-127 . The FY1994 Actalso reinstated rape and incest as qualifying circumstances allowing for the publicfunding of abortion services. The District's success was short lived. The District ofColumbia Appropriations Act for FY1996, P.L. 104-134 , and subsequent District ofColumbia appropriations acts, limited the use of District and federal funds forabortion services to cases where the mother's life is endangered or cases where thepregnancy was the result of rape or incest. P.L. 108-7 , continues the restrict on the use of District and federal funds for abortion services except in cases of rape or incest, or the life of the mother isendangered. This is consistent with provisions included in the House and Senate versions of the District of Columbia Appropriations Act for FY2003. P.L. 107-96 includes a provision lifting the congressional prohibition on the use of District funds to implement its Health Care Benefits Expansion Act. (15) Theprovision permits unmarried heterosexual and homosexual couples to register asdomestic partners. Under the Health Care Benefits Expansion Act, which wasapproved by the city's elected leadership in 1992, an unmarried person who registersas a domestic partner of a District employee hired after 1987 may be added to theDistrict employee's health care policy for an additional charge. The Act had not beenimplemented until 2002 because of a congressional prohibition first included in thegeneral provisions of District of Columbia Appropriations Act for FY1994. The city's Health Care Benefits Expansion Act allows two unmarried and unrelated individuals to register as domestic partners with the District for the purposeof securing certain health and family related benefits, including hospital visitationrights. Under the law, District government employees enrolled in the District ofColumbia Employees Health Benefits Program are allowed to purchase family healthinsurance coverage that would cover the employee's family members, includingdomestic partners. In addition, a District employee registered as a domestic partnermay assume the additional cost of the family health insurance coverage for familymembers, which would include the employee's domestic partner. Opponents of the Act believe that it is an assault on the institution of marriage, and that the Act grants unmarried gay and heterosexual couples the same standing asmarried couples. Congressional proponents of lifting the ban on the use of Districtfunds argue that the implementation of the Act is a question of home rule and localautonomy. Supporters of the amendment noted that at least nine states, 136 localgovernments, and more than 4,000 companies offer benefits to domestic partners. (16) P.L. 108-07 , consistent with the provision included in the District's FY2002 Appropriations Act, includes a general provision that allows the use of District fundsto administer the program during FY2003. In passing the District of Columbia Appropriations Act for FY2003, Congress included additional funds and authority to address issues related to special educationand public charter schools. Special Education. The District's special education program has long been characterized as ineffective and inefficient. The system has been plagued by problems in transporting students to specialeducation facilities and in the timely evaluation of students who may have specialneeds. Delays in the period between the time a student is referred and assessedincreases the number of students placed in private educational institutions, whichadds to the cost of special education. Concern about the cost of these delaysprompted Congress to include a provision in the District of Columbia AppropriationsAct for FY1999 that extends the time period between referral and assessment of astudent with special education needs, as defined by the Individuals with DisabilitiesEducation Act (IDEA) (17) or the RehabilitationEducation Act, (18) from 50 days to 120days. (19) P.L. 108-7 does not include the 120-dayspecial education evaluation andplacement time period included in previous appropriations acts. In addition, the 1999 Appropriations Act for the District of Columbia limited the amount of compensation payable to attorneys representing disabled students whoprevailed in an action brought against the District of Columbia Public Schools(DCPS ) under the IDEA. Subsequent Appropriations Acts for FY2000 and FY2001,also limited the amount of funds payable to attorneys successfully representingstudents seeking special education services. The FY1999 Act limited attorneys' feesto an hourly rate of $50 and a case ceiling of $1,300; the FY2000 limit was $60 perhour and a case ceiling of $1,560; and the FY2001 rate was $125 per hour with a caseceiling of $2,500. The District's FY2002 Appropriations Act lifted the ceiling, in part, in response to the argument that the ceiling placed a hardship on households with limitedfinancial resources. District officials countered that the payment of attorney's feesdiverted significant funds from the provision of special education services, but wereunable to quantify the amount. As a consequence the FY2002 Appropriationsdirected the superintendent of the DCPS to provide an itemized list of attorney's feesawarded plaintiffs who had prevailed in cases brought under the IDEA. (20) The Actalso directed the General Accounting Office to report to the House and SenateAppropriations Committees on attorneys' fees awarded to prevailing plaintiffsseeking remedy under the IDEA in excess of the payment ceiling established in theAppropriations Acts for FY1999, FY2000, and FY2001. (21) Copies of the GAOreports cited above may be obtained at the GAO website. (22) Section 144 of the District of Columbia Appropriations Act for FY2003, limits to $4,000, the amount of appropriated funds that may be used to pay attorneys feesfor actions brought against the DCPS under the IDEA. Section 145 of the Actrequires attorneys in special education cases brought under the IDEA to disclose allfinancial, corporate, legal, or other interest or relationships with any special educationdiagnostic services or schools to which the attorney may have referred any client. Charter Schools. Faced with declining performance of the city's public schools, Congress passed legislationallowing for the creation of public charter schools. The District of Columbia SchoolReform Act of 1995 granted to the District of Columbia Board of Education, and anewly created District of Columbia Public Charter School Board authority toestablish charter schools. These two entities act independently in granting charterschools, but combined the two boards can charter no more than 20 schools per year.Charter schools can be established in one of three ways: private or existing publicschools may convert to charter schools, or a charter school may be created as a newstartup. These schools are independent of the public school system, but like theirpublic school counterparts, they receive funds based on a uniform per pupil fundingformula. The purpose of these independent public charter schools is to offer viablealternatives to students and parents. Currently, there are 39 public charter schoolsoperating in the District serving 14% of the school population. P.L. 108-7 , includes several provisions in support of the public charter school movement in the District of Columbia. The Act appropriates $17 million for charterschool activities including $8 million for a credit enhancement revolving fund, and$5 million for a facilities improvement fund. In addition the Act establishes theOffice of Public Charter School Financing and Support and amends the District ofColumbia School Reform Act of 1995 to establish the Charter School Fund. The Actalso includes a provision directing the General Accounting Office to provide adetailed analysis of the District's and national efforts to establish adequate charterschools facilities. These provisions demonstrate Congress's continued support forthe District's charter school movement. They are intended to address a major issueconfronting charter schools in the city - finding, financing, and renovating adequatefacilities. 

Summary: On February 20, 2003, President Bush signed the Consolidated Appropriations Act for FY2003, P.L. 108-7 (formerly H. J. Res. 2). Division C of the act appropriates $512 million in federal fundsfor the District of Columbia. for fiscal year 2003. On February 13, 2003, the House and the Senateapproved the conference report ( H.Rept. 108-10 ) accompanying H. J. Res. 2. The Senate approvedan earlier version of H.J.Res. 2 , on January 23, 2003, that would have allowed theDistrict of Columbia to spend $5.8 billion in locally raised funds while Congress completed actionon the proposed $517 million in federal contributions to the District's FY2003 budget. The 107thCongress failed to complete action on the District's FY2003 Appropriations Act before it adjourned. As a consequence, Congress passed eight continuing budget resolutions freezing District ofColumbia and several other FY2003 appropriations bills at their FY2002 level until a budgetcompromise could be reached. during the 108th Congress. On October 2, 2002, several days after the submission of a revised FY2003 budget by District officials, the House Appropriations Committee reported the District of Columbia Appropriations Actfor FY2003, H.R. 5521 . In response to a congressionally imposed October 1, 2002deadline, District of Columbia officials completed action on a revised budget for FY2003 onSeptember 27, 2002. Passage of an amended FY2003 budget by District officials was aimed at addressing a $323 million budget shortfall identified by the city's chief financial officer. On July 26, 2002, the Senate Appropriations Committee reported S. 2809 , the District of Columbia Appropriations Act for FY2003. The Senate and House bills included $517million in special federal payments to the District of Columbia, which was significantly less than the$592 million requested by the District. The House and Senate bills included special federalpayments of $17 million for the District's college access program and $15 million for security andemergency preparedness activities associated with the city's status as the national capital. TheSenate bill included $15 million for capital infrastructure development while the House bill included$24 million, which was less than the $96 million requested by the District. The House and Senate bills, as reported during the 107th Congress, would have continued to allow the District to use its local funds to administer a domestic partners health insurance actapproved by the city in 1992. Prior to the passage of the P.L. 107-96 , the District of ColumbiaAppropriations Act for FY2002, Congress prohibited the implementation of the Health Care BenefitsExpansion Act. The Act allows unmarried couples to register as domestic partners and extendshealth care benefits of city employees to unrelated individuals registered as domestic partners. P.L.108-7 , includes a provision included in the House bill prohibiting the use of local and federal fundingof a needle exchange program. The Senate bill would have allowed the use of District funds for aneedle exchange in an effort to reduce the spread of HIV/AIDS. In addition, the final act includeda provision found in both House and Senate bills prohibiting the use of District or federal funds toprepare a medical marijuana ballot initiative and the use of federal or District funds for abortionservices except in instance of rape or incest. This report will be updated as warranted. Key Policy Staff Division abbreviations: G&F = Government and Finance Division; DSP = Domestic Social Policy Division