Federal Advocacy Update: Week of December 19, 2017
In this issue:
- Tax Reform Passes the House and Moves Onto the Senate
- FCC Votes to Repeal Net Neutrality Rules
- House Passage of Concealed Carry Reciprocity Act Threatens Cities
- BDAC Needs Local Feedback, Data on Wireless Siting
- Funding for CHIP Remains Uncertain
- NLC Releases 2018 National Municipal Policy
Brian Egan, 202.626.3107
Today, the U.S. House of Representatives voted 227 to 203 to pass a final version of the Tax Cuts and Jobs Act (H.R. 1), the largest change to the federal tax code in more than 30 years. On December 13, the conference committee appointed to reconcile the differing House and Senate versions of the bill held their first and only public meeting to discuss potential compromises. Members of Congress and staff from both chambers spent the past week racing to produce and pass a final bill that could be signed by the President before the holidays.
The final bill is expected to pass the Senate this evening or early tomorrow.
Here’s what’s city leaders need to know about the final report:
- Publicly Issued Tax Exempt Municipal Bonds Continue to Be Safe
As a result of the efforts of thousands of local leaders, Congress received the message that the tax exemption on publicly issued municipal bonds was not negotiable. While all versions of the bill protected this vital tool, Congress did take aim at other forms of bonds that help build stronger, healthier and more economically vibrant cities.
- Local Leaders Helped Save Private Activity Bonds (PABs) in Final Bill
The House version of the bill proposed eliminating the exemption for interest earned on PABs, but the Senate bill spared this tool that helps finance city infrastructure like hospitals, water-sewage systems, transit systems and university campuses. Local leaders helped stress the importance of PABs to their members of Congress, while NLC worked to rally signatures from members of Congress for a letter of support authored by Rep. Sam Graves (R-Mo.). A nationwide advocacy effort pushed the needle and resulted in a final bill that preserves the tax exemption for PABs.
- Advance Refunding Bonds Lose their Preferential Tax Treatment
The final bill slashes the tax exemption for interest earned on one-time refunding bonds. Local leaders continue to stress the utility of these bonds that have the potential to save cities millions, and we remain hopeful that technical corrections in the future may reinstate this tool.
- State and Local Tax Deduction (SALT) Continues to Be Restricted
One of the main city concerns of tax reform is how SALT would fare. The final bill maintains the deduction for up to $10,000 in property taxes combined with either income or sales tax. While this is real progress from where we started, it still puts the deduction beyond the reach of the millions of middle class families who currently deduct their local taxes.
- Key Tax Credits Survive with Some Restrictions
Cities initially faced possible elimination of the Historic Tax Credit (HTC), New Markets Tax Credit (NMTC) and Low-Income Housing Tax Credits (LIHTC). While the HTC and LIHTC were slightly limited, local leaders were mostly able to advocate for and preserve important tax credits for cities.
In a time of increasing preemption and declining federal investment in cities, the state and local tax (SALT) deduction has been a lasting tool for protecting local decision-making when setting local tax rates. Coupled with the elimination of advance refunding bonds, local leaders cannot afford further attempts by Congress to ask cities to do more with less.
City leaders nationwide have worked hard to send clear messages to Congress and have succeeded in making a bad bill better, but the fact remains: this final tax bill continues to target some of the tools that help millions of middle class families and the cities in which they live. To learn more about city priorities in tax reform, visit www.nlc.org/TaxReform.
Angelina Panettieri, 202.626.3196
On Thursday, December 14, the Federal Communications Commission (FCC) voted 3-2 to overturn the current network neutrality framework in its “Restoring Internet Freedom” order. The final order, which returns internet service to a “Title I” service under the Telecommunications Act, will no longer require that internet service providers (ISPs) treat all web traffic equally and will allow ISPs to engage in blocking, throttling, and paid prioritization, provided they disclose those activities to consumers. It also designates the Federal Trade Commission (FTC), rather than the FCC, as the agency charged with enforcing consumer protections in internet service. The final order also contained a provision to preempt “utility style” state and local regulation of internet service providers, along with language indicating the FCC’s intent to more broadly preempt state and local authority as necessary to uphold the order’s intent.
NLC submitted comments opposing the order, as did over 60 mayors from around the United States. NLC and the other city leaders cautioned that preemption of local authority and the regulatory framework proposed in the order would hamper local efforts to protect consumers and leave internet service providers’ customers with little recourse or protection from anticompetitive practices.
A final version of the order will be published in the Federal Register, and a number of state attorneys general, including New York State Attorney General Eric Schneiderman plan to attempt to block implementation of the Restoring Internet Freedom order through litigation.
For more information on efforts to preempt state and local governments authority over broadband infrastructure and investment, visit NLC’s blog CitiesSpeak.
Yucel Ors, 202.626.3124
On December 6, the House passed a flawed and dangerous bill that will put our cities, law enforcement officials and residents at risk — and make our communities less safe.
The Concealed Carry Reciprocity Act (H.R. 38) will force states and municipalities across the country to disregard their laws and allow anyone to carry a concealed weapon anywhere, including in gun-free school zones. This flawed legislation sets a dangerous precedent that would allow the laws of one state to trump the laws of the other 49 states. It also violates the Constitution’s Tenth Amendment that restricts the federal government’s ability to commandeer state and local law enforcement resources to enforce the laws of other states.
NLC is urging the Senate to reject this flawed legislation and work with cities and local elected leaders to find solutions that would reduce gun violence in our neighborhoods and make our communities safer. For more on how this bill would impact cities, visit NLC’s blog CitiesSpeak.
Angelina Panettieri, 202.626.3196
The Federal Communications Commission’s (FCC) Broadband Deployment Advisory Committee (BDAC), which recently met in Washington, D.C. to discuss alleged state and local barriers to broadband deployment, along with proposed state and municipal model code language, is searching for data on municipal agreements for access to rights of way and pole attachments. Specifically, a working group co-chaired by Councilmember Andy Huckaba of Lenexa, Kan. and Dr. Christopher Yoo of the University of Pennsylvania School of Law is focusing on fee and rate trends within cities of all locations and sizes.
The working group is seeking information on the following: fees assessed for access to rights of way and pole attachments, rate structures, and how municipal or regional jurisdictions determine those rates. Any data shared will only be reported in aggregate and as a range to the full BDAC, and no specific agreements or rates will be made public. To include your city’s data in this data set, email any information you are willing to share to Angelina Panettieri no later than Friday, December 22.
NLC will also submit comments to the BDAC providing feedback on its discussion drafts on alleged local barriers to broadband deployment, model state codes, and model municipal codes. Click here to read and sign on to a letter pushing the FCC to better represent local interests on the BDAC, fighting the narrative that cities would rather extract revenues from broadband providers than ensure service for their residents, and calling for more federal focus on investment and digital inclusion.
Stephanie Martinez-Ruckman, 202.626.3098
Earlier this month, the President signed a two-week continuing resolution, funding the federal government through Friday, December 22, which also included a temporary fix for the Children’s Health Insurance Program (CHIP). The fix lifted restrictions, through December 31, on the amount of money states can access through the Centers for Medicare and Medicaid Services’ reserve of unused CHIP funds. The CHIP program, along with other essential components of the health safety net for cities, expired on September 30.
While there is bipartisan support for the CHIP program, there is debate about how to pay for the extension. Senate Majority Leader McConnell has said that a CHIP provision will be included in the second spending bill later this month. The current funding bill supported by the House Appropriations Committee, which includes the previously-passed five-year extension of CHIP, two-year extension of Community Health Center funding and a two-year extension of the National Health Service Corp, is controversial due to its offsets, which include a $6.35 billion cut to the Prevention and Public Health Fund.
NLC sent a letter to congressional leadership last month stressing the importance of these programs and the devastating economic impact to cities if Congress does not act quickly to reauthorize these programs.
Avery Peters, 202.626.3020
NLC's National Municipal Policy is a compilation of federal policy positions adopted by the full NLC membership. These positions focus on federal actions, programs, and legislation that directly impact municipalities and guide all of NLC's federal advocacy efforts.
The 2018 National Municipal Policy has been updated to include policy amendments and resolutions approved during NLC's Annual Business Meeting held at the conclusion of the recent City Summit in Charlotte, N.C.