Federal Relations Update

December 14, 2012
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December 14, 2012

Muni Bonds at Risk; No Deal in Sight on Fiscal Cliff—ACTION NEEDED
Carolyn Coleman, coleman@nlc.org, 202.626.3023

Debates continue on how to avoid the fiscal cliff, but it is unclear if any progress is being made. While various scenarios of what a “deal” might look like continue to circulate as the fiscal cliff deadline nears, there’s little certainty on what a final package might look like or whether it will be short term deal, a long-term deal, a package the includes the debt-ceiling or tax reform.

Earlier this week, NLC President Marie Lopez Rogers, mayor, Avondale, AZ, First Vice President Chris Coleman, mayor, St Paul, MN, and Immediate Past President Ted Ellis, mayor, Bluffton, IN, and NLC Federal Relations staff had meetings at the White House with the President (see related story) and on the Hill with top tax advisors for Speaker Boehner and Minority Leader Pelosi in the House and with the tax reform specialist for Senate Majority Whip Durbin.

Based on what we heard in those meetings, there is certainty that limiting the exemption for interest on municipal bonds is on the table. To help safeguard this essential financing tool, cities should contact their House and Senate members now.

To assist cities in communicating with their members of Congress, NLC has created a online resource center on its website that includes copies of Op-Eds, letters, resolutions, and articles on the subject. We encourage you to adapt or repurpose these resources for your own efforts and ask that you forward copies to NLC so we can add them to our site and use them in our efforts in Washington.


Marketplace Fairness Act May Have to Wait Until 2013
Lars Etzkorn, etzkorn@nlc.org, 202.626.3173

Despite a strong coordinated advocacy effort by NLC, city leaders, and a diverse group of stakeholders including the U.S. Chamber of Commerce, organized labor, Home Depot, Amazon, and the International Council of Shopping Centers, the sense of urgency by congressional supporters to enact the Marketplace Fairness Act (S. 1832) in the lame duck session receded after Senate Majority Whip Dick Durbin (D-IL) received assurances that it would be taken up next year. Instead of trying to advance the legislation in the session, Senator Durbin now says he will wait until the next Congress for the Senate Finance Committee to act and bring it to the Senate floor. 


If enacted, the bill would have permitted state and local government to collect $23 billion in sales taxes currently owed on internet and mail order sales. Despite the setback, NLC will resume its efforts in the next year to get pass the bill and level the playing field between e-commerce and brick and mortar retailers.


NLC Seeks Retraction of Sen. Coburn's CDBG Waste Claims
Mike Wallace, wallace@nlc.org, 202.626.3025

Last week, NLC joined with groups representing local governments and community development organizations in rebutting claims of government waste related to the Community Development Block Grant (CDBG) leveled against five local governments and small businesses by Senator Tom Coburn (R-OK). In October, Senator Coburn released the 2012 edition of his “Waste Book,” a report highlighting federally funded programs and services he deems wasteful. Of the 100 instances of waste identified, five were funded via CDBG. Groups supporting CDBG researched the five projects and found each in compliance with federal regulations and evidence of their positive economic impact. In a letter to Sen. Coburn, the groups requested a retraction of the claims, but have yet to get a response from the Senator.


HHS Issues Proposed Rules Governing 2014 Employer Benefit, Payment Parameters
Neil Bomberg, bomberg@nlc.org, 202.626.3042

Last Friday, the U.S. Department of Health and Human Services (HHS) published proposed rules governing a wide range of issues surrounding benefit and payment parameters for employers, including “cost sharing reductions” for low- and moderate-income employees that obtain health insurance through Exchanges. Of particular interest to cities that employ fewer than 50 employees is the proposed rule governing Exchanges for small employers known as SHOPs. The rule provides guidance on how to determine whether an employer can be considered a small employer; safe harbor provisions for determining how much employers must contribute; the minimum participation rates required under federal law; and the standards that health plans must meet to participate in an Exchange or SHOP. The deadline to submit comments is December 31, 2012.

Given the significant impact such complex rules could have on cities, NLC is concerned that the agency is allowing less than 30 days to respond. We're analyzing the potential impacts the rules could have on cities and at the same time requesting that HHS extend the comment period to no less than 60 days.


New Funding Available for Strong Cities Strong Communities Network
Mike Wallace, wallace@nlc.org, 202.626.3025

Last week, the U.S. Department of Housing and Urban Development announced a Notice of Funding Availability for the Strong Cities Strong Communities National Resource Network, one of four key components of the Administration’s Strong Cities Strong Communities Initiative. The initiative, originally announced in July 2011, was designed to strengthen the capacity of local governments and spark economic growth in local communities, while ensuring taxpayer dollars are used wisely and efficiently.

Approximately $10 million in funding will be awarded to one entity or a consortium to manage and implement the Network, a capacity building program to assist distressed localities by functioning as a central portal to connect these communities to national and local experts. The Network will align federal resources as well as coordinate the separate and wide-ranging pools of technical experts and assistance programs with the needs of each community to help them make more effective investments at the local level. Interested applicants must apply by January 28, 2012 and can visit www.grants.gov for more information.


Supreme Court Expands Scope of Takings Clause
Lars Etzkorn, etzkorn@nlc.org, 202.626.3173

In a decision handed down earlier this week in which NLC participated, the U.S. Supreme Court expanded the definition of a taking of property, thus opening the door for increased claims against local and all other levels of government. The Court's unanimous decision in Arkansas Game & Fish Commission v. United States reverses prior rulings that only a permanent government-caused taking can give rise to a claim for just compensation under the Fifth Amendment of the U.S. Constitution.

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In This Issue

Muni Bonds at Risk; No Deal in Sight on Fiscal Cliff—ACTION NEEDED

Marketplace Fairness Act May Have to Wait Until 2013

NLC Seeks Retraction of Sen. Coburn's CDBG Waste Claims

HHS Issues Proposed Rules Governing 2014 Employer Benefit, Payment Parameters

New Funding Available for Strong Cities Strong Communities Network

Supreme Court Expands Scope of Takings Clause


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