Federal Advocacy Update: Week of October 24, 2017

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Capitol Hill Dome

In this issue:

Senate Moves Budget and Tax Reform Forward

Michael Wallace, 202.626.3025

On October 19, the Senate passed a fiscal year 2018 budget resolution that includes reconciliation instructions intended to remove any threat of filibuster against forthcoming tax reform legislation.  The Senate also approved an amendment to the resolution, offered by Senator Capito (R-WA), that instructs Senate tax-writers to cap the deductibility of state and local taxes (SALT) to partially offset, or “pay for”, the anticipated loss in federal revenue that would come with federal tax cuts.

Preserving the deductibility of SALT, including property, income, and sales taxes, is a top priority for cities, and NLC opposed the Capito amendment. “Cities condemn the passage of the Capito amendment that threatens the state and local tax (SALT) deduction. Local leaders know that SALT prevents double taxation by allowing millions of middle class families to deduct their local property, sales and income taxes, and helps local governments raise the revenues needed to make critical investments in infrastructure, public safety and education,” said NLC President Matt Zone, councilmember, Cleveland in a statement released after the vote.

A recent report from the Center for Budget and Policy Priorities highlights the likely consequences to cities and communities if Congress approves a cap on the deductibility of SALT.  Among them, capping SALT deductibility would strain state and local budgets, destabilize funding for schools and public safety, and create uncertainty in the bond market.

The House is expected to approve the Senate Budget Resolution without further amendment this week, setting the stage for the tax reform debate to come. There’s still time for city leaders to make their voices heard and urge Congress to preserve SALT and the tax-exemption for municipal bonds. Visit nlc.org/SALT to find the tools you need to advocate for key deductions cities rely on before a tax reform proposal is released.

 

Sign on to Fight Broadband Preemption

Angelina Panettieri, 202.626.3196

The Federal Communications Commission’s (FCC’s) final meeting of the Broadband Deployment Advisory Committee (BDAC) is slated to be held on November 9. The BDAC, which disproportionately favors broadband providers over public entities in its membership, is expected to issue recommendations on removing state and local government barriers to broadband deployment, and model state and local codes for broadband deployment. The BDAC’s work also directly relates to ongoing rulemakings at the FCC focused on preempting local authority over broadband infrastructure, wireless sites, and negotiations with broadband providers, which NLC and many cities, as well as state municipal leagues have actively lobbied this year.

The leadership of NLC, the U.S. Conference of Mayors, and the National Association of Counties have written a letter to the FCC urging the agency to more fully consider the perspectives of local governments in its BDAC recommendations and ongoing rulemaking around local land use and rights-of-way governance. To add your name to this letter and fight federal overreach into local broadband decision making, complete this form by November 1.

 

Florida Local Leaders Travel to DC to Advocate for Cities

Ashley Smith, 202.626.3094

City officials from Florida recently traveled to Washington, D.C. to meet with members of Congress and advocate for key federal issues affecting municipalities. Led by FLC President Commissioner Gil Ziffer, Tallahassee and FAST Chair Commissioner Scott Maddox, Tallahassee, FLC brought 36 members of the Federal Action Strike Team (FAST) and three staff members to the nation’s Capital.

Florida League of Cities Fly-In

Kicking off their fly-in, the advocates attended a briefing on Capitol Hill hosted by Reps. Vern Buchanan (R-Fla.) and Alcee Hastings (D-Fla.), the co-chairs of the Florida congressional delegation. During the briefing, Governor Rick Scott provided an update on Hurricane Irma recovery efforts.

Next, the advocates received a briefing from NLC's Federal Advocacy team, before traveling back to Capitol Hill. During their meetings on October 11 and 12, FLC FAST members advocated for the tax exemption for municipal bonds, the National Flood Insurance Program (NFIP), and the FEMA Public Assistance Program.

Is your city or state municipal league planning an advocacy visit to Washington, D.C.? NLC is here to help. Email advocacy@nlc.org for assistance and to coordinate your advocacy efforts.

Senate Passes Integrated Planning Bill

Carolyn Berndt, 202.626.3101

This month, with NLC support, the Senate unanimously passed the Water Infrastructure Flexibility Act (S. 692) to codify the U.S. Environmental Protection Agency’s (EPA) Integrated Planning and Financial Capability policies as useful tools for local governments to comprehensively deal with wastewater and stormwater investments as well as unfunded mandates.

The bipartisan bill sponsored by Senators Deb Fischer (R-Neb.), Benjamin Cardin (D-Md.), and Sherrod Brown (D-OH) would allow local governments to work with their state and the EPA to prioritize investment in wet weather overflows and flooding collectively, rather than individually, by codifying EPA’s memorandums on green infrastructure, integrated planning and affordability. The bill would also allow for consideration of other service costs, including drinking water.

Together these provisions will help reduce costs for fixed- and low-income citizens who spend a significant portion of their income on water and wastewater bills. The legislation would also allow local governments who undertake integrated planning to incorporate green infrastructure components into municipal stormwater, combined sewer overflow (CSO) and other water plans in a more cost-effective way.

In May, Mayor Johnny DuPree, Ph.D., of Hattiesburg, Mississippi testified on behalf of NLC before the House Transportation and Infrastructure Subcommittee on Water Resources and Environment in support of integrated planning legislation.  

Similar legislation has been introduced in the House, including the Water Quality Improvement Act (H.R. 465) sponsored by Representatives Bob Gibbs (R-OH) and Steve Chabot (R-OH) and Senate companion bill H.R. 2355, sponsored by Representatives Bob Latta (R-OH), David Joyce (R-OH), Grace Napolitano (D-Calif.), Cheri Bustos (D-Ill.), Lloyd Smucker (R-Pa.) and Marcia Fudge (D-OH).

 

FCC Fully Appointed: NLC Urges Collaboration Rather than Preemption

Angelina Panettieri, 202.626.3196

With the Senate confirmation of Federal Communications Commission (FCC) Chairman Ajit Pai’s second term, the FCC has now begun work for the first time this year with a full slate of commissioners. Pai’s confirmation followed Senate confirmations of Republican Commissioner Brendan Carr and Democratic Commissioner Jessica Rosenworcel, who returns to the FCC after her term lapsed at the end of 2016.

In response to the Senate vote, NLC sent a letter to Chairman Pai congratulating him on his new term and urging the Chairman and his colleagues to work collaboratively with cities to close the digital divide, rather than further preempting local authority on issues such as broadband infrastructure siting. Pai has cited speeding the deployment of broadband infrastructure, particularly wireless infrastructure, as one of his top priorities for improving Americans’ access to broadband.

The newly-reappointed FCC Commissioner Jessica Rosenworcel has also announced new plans to tackle the digital divide. During a Senate Commerce Committee field hearing in New Hampshire this month, Commissioner Rosenworcel announced an effort to crowdsource broadband service through reports from the public, to supplement a now-outdated federal broadband map. Commissioner Rosenworcel has requested that members of the public who would like to report areas lacking broadband service email that information to broadbandfail@fcc.gov.  

 

Speaker's Bipartisan Task Force Examines Federalism

Carolyn Berndt, 202.626.3101

On October 12, the Speaker’s Task Force on Intergovernmental Affairs held its second hearing on “Are we ‘Federalizing’ Federalism? A Primer on Federalism, State and Local Government and Interrelations with the Federal Government,” which provided an academic perspective on basic philosophy of federalism and what federalism means in the 21st century.

The bipartisan Task Force, chaired by Rep. Rob Bishop (R-UT), aims to examine ways to restore the balance of power between the federal government and states, tribes, and local governments. NLC, along with the other state and local government associations, serves on the Advisory Council to the Task Force to provide a forum for discussion and ultimately develop specific recommendations.

Recently, NLC submitted a memo to Chairman Bishop on a proposed roadmap for the Task Force for hearings in 2017 and 2018 and possible recommendations for action. Several of the recommendations to improve the federal-state regulatory process include update the Unfunded Mandates Reform Act; reestablish an institution like the Advisory Commission on Intergovernmental Relations (ACIR); and establish state and local government advisory committees within all federal agencies.  

NLC Weighs in on Water Infrastructure

 

Carolyn Berndt, 202.626.3101

In a follow up to a hearing last month on “Building a 21st Century Infrastructure for America: Water Stakeholders’ Perspectives” before the House Transportation and Infrastructure Committee, Subcommittee on Water Resources and Environment, NLC submitted a Statement on the Record on policy proposals to improve our nation’s water infrastructure and address critical issues facing cities and local water utilities.

NLC argued that given the massive infrastructure need in our country and the range of challenges facing cities with regard to water infrastructure — from aging infrastructure to affordability and climate change impacts — now is the time to make significant investments, including financing options and direct funding to cities, to keep our economy moving forward.

Specifically, NLC calls on Congress to pass legislation that will:

  • Reauthorize and provide federal funding for water infrastructure improvements through the Clean Water and Drinking Water State Revolving Loan Fund (SRF) programs.
  • Provide full appropriation to the Water Infrastructure Finance and Innovation Act (WIFIA) and permanently establish the program beyond a pilot program.
  • Remove the federal volume cap on tax-exempt bonds for water and wastewater infrastructure projects.
  • Establish a comprehensive and flexible integrated planning and permitting process for local water, wastewater and stormwater management.
  • Clarify that rebates provide by local water utilities to homeowners for water conservation and water efficiency are not subject to a federal income tax.

Competing Forces Work to Reform Healthcare Markets

 

Stephanie Martinez-Ruckman, 202.626.3098

The future of health care reform has been at the top of headlines in Washington since January, but especially so in the last six months.  Since the Senate failed to come to agreement on a legislative package to repeal and replace the Affordable Care Act (ACA), Congress and the Administration have turned their sights towards addressing changes through legislation and regulation.

In Congress, the Senate has been focused on individual market stabilization while the Administration continues to examine how it can address changes to the ACA through executive order and, ultimately, regulatory changes through agencies.  October has been a busy month in this regard, with the issuance of an executive order by President Trump, legal actions as well as bipartisan compromise in Congress. 

To learn more about the most recent developments on health care in Washington, click here to read more on NLC’s blog, CitiesSpeak.  

 

EPA Issues Rulemaking to Withdraw Clean Power Plan

Carolyn Berndt, 202.626.3101

On October 16, the U.S. Environmental Protection Agency (EPA) announced a proposed rule to repeal the 2015 Clean Power Plan (CPP), which aimed to reduce greenhouse gas emissions from existing power plants by 32 percent below 2005 levels by 2030. EPA is accepting public comments on the proposed rule through December 15.

The proposed rule is consistent with the Executive Order on Promoting Energy Independence and Economic Growth (April 2017), which called for a review of the Clean Power Plan and the possibility of the Agency to subsequently revise or rescind the rule.  

After reviewing the CPP, EPA has proposed to determine that the Obama-era regulation exceeds the Agency’s statutory authority under the Clean Air Act. Specifically, the proposed rule to repeal the CPP questions EPA’s authority to regulate entities to take actions “beyond the fence,” meaning beyond individual plant upgrades, such as allowing generators that could not meet emission goals to offset their power with electricity from zero or lower-emitting sources like energy efficiency programs and renewable energy.

The proposed rule, however, does not address the EPA’s previous conclusion that carbon dioxide emissions are linked to global warming, a conclusion also known as the “endangerment finding.” By not repealing the endangerment finding, it is likely that the EPA will attempt to replace the Clean Power Plan with a scaled-back version, rather than attempting to avoid regulating carbon emissions entirely.

In response to the proposed rule, NLC President Matt Zone, councilmember, Cleveland said, “Today’s announcement is a major disappointment to cities and local leaders, and represents a major step back for the future of our country, our public health and our economic vitality. To date, the Clean Power Plan (CPP) represents the most meaningful American effort to counter the harmful effects of greenhouse gases and establish our role as a global leader for cleaner energy.”

In January 2016, the U.S. Supreme Court stayed the rule before it went into effect until legal challenges concluded. In April 2017, the D.C. Circuit Court of Appeals put the case in a temporary abeyance while the Trump administration rethinks the proposal. As long as the case is on the court’s docket — active or in abeyance — the Clean Power Plan cannot take effect.

For more information on the proposed rule, including how to comment, visit the EPA website.

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