Federal Advocacy Update

February 28, 2014

In this issue:

House Considers Flood Insurance Bill

Yucel Ors, ors@nlc.org, 202.626.3124

The U.S. House of Representatives is expected to consider a modified version of the Homeowner Flood Insurance Affordability Act of 2014 (H.R. 3370). NLC supports the bill, which will help ensure that flood insurance rate increases do not adversely impact local communities, while promoting the solvency of the National Flood Insurance Program (NFIP). The amended bill will be considered under a procedure that will require a 2/3 majority vote to pass and does not allow for any amendments. Please call your representative and urge a vote YES on H.R. 3370.

H.R. 3370 contains measures to stop, slow or reverse skyrocketing flood insurance premium rate increases for some properties called for by the Biggert-Waters Act of 2012 (BW-12). BW-12 aimed at assuring the solvency of the deeply indebted National Flood Insurance Program (NFIP), and requires FEMA to adjust flood insurance premiums to reflect true flood risk and phase out subsidies for properties built before the community adopted its first Flood Insurance Rate Map (FIRM).

Assuming the House bill does pass, it will need to be reconciled through a conference committee with S. 1926, a different version of the bill by the same name that the Senate passed earlier this year. The Senate measure calls for a four year delay in the rate increases pending the completion of the affordability study.

Call your representative now»

President Announces $600 Million in TIGER Grants

Leslie Wollack, wollack@nlc.org, 202.626.3029

Earlier this week, President Obama announced a new round of federal Transportation Investments Generating Economic Recovery (TIGER) grants totaling $600 million, as part of a broader four-year transportation program. These grants allow cities and towns across the nation to leverage federal government seed money and pair it with local resources to transform their communities. Initially created as part of the American Recovery and Reinvestment Act of 2009 (ARRA), the previous five rounds of the program have funded 270 projects across all 50 states.

NLC President Chris Coleman, mayor, Saint Paul, Minnesota, hosted President Obama for the announcement in his city. In response to the President's announcement, Coleman said, "the President should be commended for his continued commitment to modernize and expand our nation's infrastructure that is so critical to the economic health of our nation. As the main owners and operators of roads, bridges and transit systems around the nation, city officials welcome the Administration's recognition of the need to prioritize city voices in future decision-making as we rebuild our national transportation network. .. Local leaders look forward to working with President Obama, Representatives Shuster and Rahall in the House, and Senators Boxer and Vitter in the Senate as they move ahead in developing the next generation federal transportation investment program."

Cities can begin applying for the TIGER grants on April 3 and and must submit final applications by April 28, 2014. Up to $35 million of the program may be awarded for planning grants.

Read more about the current round of funding and upcoming informational webinars on the Department of Transportation's website» 

House Judiciary Committee to Hold Marketplace Fairness Hearing

Carolyn Coleman, coleman@nlc.org, 202.626.3023

The House Judiciary Committee has scheduled a long-awaited hearing on March 4 to consider the issue of marketplace fairness, a top legislative priority for NLC. The hearing, titled "Exploring Alternative Solutions on the Internet Sales Tax Issue," is a response to previous calls by the committee chairman for "fresh approaches" to marketplace fairness legislation.

Last September, Judiciary Committee Chairman Bob Goodlatte (R-VA) released a set of principles in September outlining what remote sales tax legislation should include and address.

NLC continues to support the Marketplace Fairness Act as passed by the Senate and introduced by Rep. Steve Womack (R-AR) and to urge support for the legislation that will level the playing field between main street retailers who can be compelled to collect taxes on sales and online remote ones who cannot be.

Learn more about NLC's position»

Senators Reintroduce Energy Efficiency Bill, Renew Push for Floor Action

Carolyn Berndt, berndt@nlc.org, 202.626.3101

Yesterday, Sens. Jeanne Shaheen (D-NH) and Rob Portman (R-OH) reintroduced the Energy Savings and Industrial Competitiveness Act (read a section by section summary) to improve energy efficiency across a variety of sectors, including residential and commercial buildings, schools, and federal buildings. NLC supports the new bill as key legislation in helping to support local action on climate adaptation.

The reintroduced bill builds on the base text of a previous version, S. 1392, and incorporates ten amendments that bolster energy savings, job creation and carbon emissions reductions. One key amendment that NLC supports is the Sensible Accounting to Value Energy (SAVE) Act, sponsored by Sens. Michael Bennet (D-CO) and Johnny Isakson (R-GA), which provides lenders and homeowners with more flexible federal mortgage underwriting rules that would include a home's expected energy cost savings when determining the value and affordability of the home. With the addition of these amendments and 10 sponsors, Sens. Shaheen and Portman believe the bill has more than 60 votes and could pass the Senate.

The previous version of the bill passed the Senate Energy and Natural Resources Committee last May and was on the Senate floor last September before action ground to a halt because of an amendment dispute and to make time for deficit and appropriations issues. With the new bill questions remain whether Majority Leader Harry Reid (D-NV) will bring it back up to the floor for a vote, and whether votes on additional amendments will be allowed. House companion bill, H.R. 1616, sponsored by Reps. David McKinley (R-WV) and Peter Welch (D-VT), has been referred to the House Committee on Energy and Commerce with no action to date.

Read a summary of changes to the Energy Savings and Industrial Competitiveness Act»

Policy & Advocacy Committees to Meet in Washington

Angelina Panettieri, panettieri@nlc.org, 202.626.3196

NLC's Policy and Advocacy Committees will hold their first working meetings of 2014 during the March Congressional City Conference in Washington, D.C. The committees expect to discuss a variety of timely policy matters important to cities, including transportation-oriented development, sustainability, and local health initiatives.

Use the links below to learn more about each committee and access resources.

NLC Policy and Advocacy Committees:

Policy and Advocacy Committee meetings are open to all NLC members.

View the full schedule of events at the Congressional City Conference» 

House Ways and Means Chair Creatively Caps Municipal Bond Exemption in Draft Tax Reform Plan

Mike Wallace, wallace@nlc.org, 202.626.3025

House Ways and Means Chairman Dave Camp (R-MI) unveiled his long anticipated draft plan to reform the U.S. tax code. The plan would simply the tax code by collapsing the seven existing income tax brackets for individuals to two and lowering top individual and corporate income tax rates. To remain revenue neutral despite lowering tax rates, the plan would shrink or eliminate a host of tax expenditures and impose a surtax on wealthy individuals and certain large businesses. NLC opposes changes to certain tax expenditures important to cities and towns that would be impacted by the plan include municipal and private activity bonds, deductibility for state and local taxes, the home mortgage interest deduction, and the earned-income tax credit.

Although the plan would not specifically cap or eliminate the tax-exemption for interest earned on municipal bonds, it would apply an additional 10 percent surtax on income for high earning individuals making over $450,000 a year, including income that is otherwise tax exempt, such as municipal bonds. The plan would also eliminate private activity bonds, which are essential for financing the construction of schools, hospitals, and affordable housing.

In addition to bonds, to remain revenue neutral, the draft plan calls for rolling back taxpayer protections against double-taxation by eliminating the federal deduction for state and local government tax payments. Eliminating the deduction pays for almost 20 percent of the rate reductions in the draft plan by shifting local dollars to the federal level. Changes to the mortgage interest deduction and the earned-income tax credit would also shift local dollars back to the federal government.

As far as the outlook for the plan, it's likely too ambitious to be considered this year by a Congress that has been serially incapable of finding common ground on big issues. However, the plan's 10 percent surtax on tax-exempt income for high earners is another sign that the tax exemption for municipal bonds remains at risk, and will be at risk as long as Congress desires additional revenue without raising taxes.

NLC Urges Organizations to Sign Letter Supporting Greater Federal Investment in Housing and Transportation

Mike Wallace, wallace@nlc.org, 202.626.3025

For the third year in a row, NLC is leading a coalition of the nation's largest housing and transportation advocates, and other local government groups, to spearhead a letter to Congress urging increased funding for the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Transportation (DOT) in the federal budget.

The letter urges Congressional Appropriators to "increase the 302(b) allocation to the Subcommittee on Transportation, Housing and Urban Development, and Related Agencies (THUD) to the highest possible level in fiscal year (FY) 2014." The language of the request reflects the federal budgeting process of allocating all federal funding through 12 categories which are represented by the 12 Appropriations Subcommittees. Although each subcommittee funds programs important to cities and towns, a low allocation to the THUD Subcommittee typically results in a zero-sum game for local governments as housing and transportation interest groups compete for funding for their specific priorities. A higher allocation ensures sufficient funding for both transportation and housing priorities, including CDBG and public transit grants.

As the letter points out, "since FY 2010, the combination of budget cuts and sequestration have reduced the THUD allocation by over 25%. The devastating and wasteful impact of these cuts appear in countless metrics, from $101 billion in wasted fuel and lost productivity resulting from traffic congestion on 42% of America's major highways, to stalled transportation projects that have left 45% of American households without access to public transit; from 70,000 low-income families losing rental assistance opportunities since 2012, to risking recent progress in reducing chronic homelessness by reducing overall support for the production and preservation of affordable housing."

Last year, a similar letter was signed by 188 national groups and 2,234 state and local groups, including many cities and towns. Many credit the letter for helping the Senate hold the line against even steeper cuts often sought by the House.

Add your organization to the letter»