Before leaving Washington for the holidays, Congress made headlines with an agreement to fund the federal government for the remainder of Fiscal Year 2020 and avert a shutdown. However, the federal government also completed a large amount of legislative and regulatory activity that you may have missed.
Congress slipped a tax-extenders bill into its FY2020 spending package. In addition to funding the items we expected, Congress also approved:
- A full repeal of the 40% “Cadillac Tax“, a 40% excise tax on high-cost employer-sponsored health plans. NLC has long been concerned by the financial burden that the Cadillac Tax would have posed to municipal governments because municipal employees often receive higher-end health insurance policies. After years of successfully delaying the tax, and by working in coalition with others through the Alliance to Fight the 40, this threat is over.
- Repeal of the Nonprofit Employee Benefits Tax. To help offset the 2017 Tax Cuts and Jobs Act, Congress required associations and other tax-exempt organizations to pay a 21 percent unrelated business income tax (UBIT) on employee parking and transportation benefits. NLC supports transit incentives and is pleased that the FY2020 spending bill repeals that requirement.
- Extension of the New Markets Tax Credit program (NMTC) until 2020, and an increase over the previous $3.5 billion limit to $5 billion in annual NMTC allocation authority. Without this provision, New Markets Tax Credit authorization would have expired at the end of 2019. The New Markets Tax Credit is a low-cost tax incentive that delivers billions of dollars annually to low-income communities with high unemployment and poverty, financing everything from hospitals to manufacturing facilities to rural broadband expansions.
- While not a tax, NLC is also celebrating the inclusion of $425 million in election cybersecurity grants, and $7.6 billion in funding for the 2020 Census.
In addition to the spending package, Congress advanced the following bills:
- Congress approved the TRACED Act, with NLC’s support. The legislation requires telecom carriers to implement, at no extra charge, a number-authentication system to help consumers identify who’s calling them, as a defense against phone scams. It would also increase penalties for robocallers who flout the law.
- Both the House and Senate have approved their versions of the Broadband Deployment Accuracy and Technological Availability (DATA) Act, which would require the Federal Communications Commission to collect more granular broadband data from providers, enact more stringent requirements for mobile service data accuracy, and allow consumer, state, local, and tribal groups to challenge federal broadband coverage maps.
- The House of Representatives approved the United States-Mexico-Canada Agreement (USMCA). The agreement passed suddenly, and with significant bipartisan support. Now it goes to the Senate and is expected to get a vote early this year. NLC approved a resolution urging Congress to vote on USMCA during City Summit 2019.
- The House of Representatives approved HR 5377, the Restoring Tax Fairness for State and Localities Act. To help offset the 2017 Tax Cuts and Jobs Act, Congress capped the State and Local Tax Deduction (SALT) despite strong opposition from NLC and other local government groups. This bill amended that cap for 2019 and eliminates the cap for 2020 and 2021. The SALT deduction was one of the six deductions allowed under the original tax code when it was enacted in 1913, and it remains an integral part of our intergovernmental system of taxation. NLC and other local government groups sent a letter supporting the measure earlier this month. The bill must now pass the Senate.
- Two bipartisan housing bills were introduced with NLC’s endorsement. The Eviction Crisis Act, cosponsored by Senators Bennet (D-CO) and Portman (R-OH); and the Family Stability and Opportunity Vouchers Act, co-sponsored by Senators Chris Van Hollen (D-MD) and Todd Young (R-IN).
Lastly, there were several actions taken on the regulatory side, including:
- Final regulations on Opportunity Zones have been released. NLC and other organizations are working with the original sponsors of the legislation to make further improvements to the program.
- The EPA extended the comment deadline for proposed changes to the Lead and Copper Rule revisions to Feb. 12. NLC recently published a blog on what cities need to know about the proposed changes.
- HUD released a “REQUEST FOR INFORMATION ON ELIMINATING REGULATORY BARRIERS TO AFFORDABLE HOUSING” which is due January 21st. NLC is drafting comments for submission.
- The Treasury Department released “Proposed Changes to Community Reinvestment Act Regulations“, and comments are due at the end of February. NLC is drafting comments for submission.
- The comment period for Hazardous Materials: Liquefied Natural Gas by Rail (PHMSA-2018-0025) to allow for the bulk transport of liquefied natural gas (LNG) in rail tank cars was extended to January 13th. Comment here.
- The Federal Railroad Administration (FRA) has also extended its deadline for applications to the Restoration and Enhancement Grant Program for intercity passenger-rail service to February 5th. Through a bump from the 2020 Appropriations Act, the program will now make $26 million available in the next award cycle. Cities and other government entities including Amtrak and other intercity passenger-rail companies are eligible.
- The FAA published the long-awaited notice of proposed rulemaking for Remote Identification of UAS in the Federal Register on December 31st. The notice will be open for 60 days for cities to comment on how drones will be identified by local first responders and government entities.
Cities, towns and villages are hopeful that our federal leaders carry the momentum of the end of 2019 into this new year, and continue to work with local governments to take action on behalf of our nation’s communities.
About the author: Irma Esparza Diggs is a senior executive and director of federal advocacy at the National League of Cities. Follow Irma on Twitter @iediggs.