Federal Advocacy Update

In this issue:

E-fairness Gains Momentum; More Local Voices Needed

Priya Ghosh Ahola, 202.626.3015

In a meeting with Congressman Jason Chaffetz (R-UT), lead sponsor of the Remote Transactions Parity Act (RTPA, HR 2775), last week, Mayor Becker thanked the Congressman for his leadership in putting forth a solution to this issue and pledged the support of cities and towns to seeing it get resolved this session. If enacted, the RTPA will give states and local governments the flexibility to require remote online retailers to collect the sales taxes that are already owed on remote purchases. Closing this online sales tax loophole would not only level the playing field between online sellers and Main Street brick and mortar ones who are required to collect the tax, it would also mean resources for local governments to fund much needed local services like infrastructure and public safety. It is estimated that this loophole costs states and local governments $23 billion annually, which is why its passage is a top priority for NLC.

Hundreds of city leaders have sent letters to their representatives, as have state municipal leagues. So far, as a result of your efforts, more than 150 House members have been contacted about supporting RTPA. The number of co-sponsors on the bill has more than quadrupled from the original eight to 38. This is good; however, more are needed to move the legislation this year.

If you haven't already, please contact your House members and thank them for their support if they are already a co-sponsor, or urge them to cosponsor the bill if they have not. If you would like to send your representative an official letter from your city, you can download sample letter language to use. You can also view a current list of organizations who have endorsed the bill online. Do your part to get e-fairness legislation passed this year. 

National League of Cities Leadership Goes to the Hill to Make the Case for Transportation Funding

Mike Wallace, 202.626.3025

NLC President Ralph Becker meets with Senator Barbara Boxer (D-Calif.), Ranking Member of the Senate EPW Committee, to urge support for the Wicker-Booker STP amendment to the DRIVE Act. View a slideshow of the full visit.

As the deadline approaches for transportation funding to run out, Senate Environment and Public Works Committee Chair Jim Inhofe (R-OK) and Ranking Member Barbara Boxer (D-CA) unveiled the bipartisan "DRIVE Act" (S 1647), the long-awaited Senate proposal for a new long term transportation bill. The DRIVE Act would authorize funding levels for programs supported by the Highway Trust Fund over six years. "For cities and towns, the DRIVE Act is an improvement over the status quo. The bill would improve local control of funding under the Surface Transportation Program and the Transportation Alternatives Program. But there is much more that could - and should - be done. The National League of Cities looks forward to continuing our strong partnership with Chairman Inhofe and Ranking Member Boxer to achieve our goal of enacting a forward-looking, long-term, multi-modal transportation bill," said NLC Executive Director upon the bill's introduction.

The current short-term authorization for federal transportation programs under the Highway Trust Fund will expire at the end of July, and additional short term extensions will likely be necessary so that all the committees of jurisdiction in the House and Senate can complete work on their sections of the transportation bill.

In the Senate, three Committees have jurisdiction over the Transportation Bill - the Senate Environment and Public Works Committee (EPW), the Commerce, Science, and Transportation Committee (Commerce), and the Banking, Housing, and Urban Affairs Committee (Banking). A fourth, the Senate Finance Committee, is responsible for raising revenue to pay for programs authorized under the transportation bill. In the House, two committees have jurisdiction over the Transportation Bill - the House Ways and Means Committee and the Transportation and Infrastructure Committee.

While the DRIVE ACT supports many of NLC's transportation goals and has now passed the EPW Committee, NLC is working on a floor amendment with Senators Roger Wicker (R-MS) and Cory Booker (D-NJ) to increase the percentage of funds allocated to local jurisdictions under the Surface Transportation Program (STP).

In addition, in meetings on the Hill last week, NLC President Ralph Becker met with EPW Chairman Inhofe, Ranking Member Boxer, and others to brief them on the city perspective on the importance of a long term bill and to urge their support for an increase in the STP allocation when an amendment comes up on the Senate Floor.

"Mayor Becker thanks Chairman Inhofe for introducing the DRIVE Act, a long-term transportation bill, and discusses support for multi-modal and active transportation projects that drive development and job creation in cities and towns today."

Mayor Becker thanks Chairman Inhofe for introducing the DRIVE Act, a long-term transportation bill, and discusses support for multi-modal and active transportation projects that drive development and job creation in cities and towns today.

Following EPW approval of the DRIVE Act, earlier this week, the Senate Commerce Committee approved the Comprehensive Transportation and Consumer Protection Act of 2015 (S 1732), which would authorize rail and highway safety programs in the Transportation bill. Among other things, the bill authorizes Amtrak funding and requires new safety mandates on speed, grade crossings, and train control in response to recent derailments and explosions. The Senate Banking Committee has indicated that it will introduce a bill soon that covers the transit portion of the bill.

One area of concern for NLC in the Commerce bill are changes being proposed to the popular TIGER Grant program that has provided millions in funding for local transit priorities, including light rail and streetcar projects. The Commerce bill would authorize a "TIGER-like" program that may eliminate the multi-modal approach to rail and focus TIGER funds much more narrowly on projects benefitting freight infrastructure only. NLC urged the Commerce Committee to reconsider this in light of the successful multi-modal approach. The Senate Banking Committee, which holds jurisdiction over transit, may also be able to enact a fix.

In the House, lawmakers conceded the impossibility of passing a long-term bill before the August recess by approving a five-month extension of surface transportation programs that would keep projects funded for the rest of the year. The extension, sponsored by House Ways and Means Committee Chair Paul Ryan (R-WI) and House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) would provide $8 billion through a combination of tax compliance measures and reduced spending of Transportation Security Administration fees in 2025 and 2026. Of that amount, $6.07 billion is for the Highway Account and $2 billion is for the Mass Transit Account.

Despite the short-term extension, leaders in the House and Senate have said approval of a long-term bill will remain a priority for this year.

FY 2016 Spending Bills in Doubt

Mike Wallace, 202.626.3025

Despite the efforts of congressional leaders to "return to regular order", it appears that the annual federal appropriations process is headed for another break down. Under regular order, Congress would complete work on all appropriations bills before the new fiscal year begins on October 1.

To date, the House has passed six of 12 appropriations bills, the Senate has passed none, and it is unclear if any additional new spending bills will be voted on before the August recess. If Congress fails to approve the spending bills before the new year begins, as appears likely to happen, local officials should expect to operate under another series of funding extensions as has become common in recent years. Missing the deadline also raise the prospects of another government shutdown if consensus on an omnibus bill or continuing resolution cannot be reached.

Complicating the ability to reach a bipartisan consensus on any spending bill this year are the spending caps imposed by sequestration. Cases in point are the Transportation-Housing and Urban Development spending bills approved by the House and the Senate, where both chambers were forced to make difficult choices in order to stay under the caps. Among local priorities, one key difference between the House and Senate bills is the treatment of the HOME Investment Partnership program. The House bill would raid federal funding set aside for the National Housing Trust Fund to maintain existing levels of funding for the HOME program. As a result, the House bill would effectively cancel the Housing Trust Fund. The Senate bill takes the opposite approach, protecting the Housing Trust Fund but cutting the HOME program by 93 percent from $900 million to $66 million and seriously jeopardizing local commitments to the construction of affordable housing. The HOME Coalition, of which NLC is a member, is advocating against cuts to HOME and is maintaining a HOME advocacy page on the Habitat for Humanity website.

Labor Department Proposes Changes to Overtime Rules

Carolyn Coleman, 202.626.3023

The U.S. Department of Labor has proposed changes to the Fair Labor Standards Act (FLSA) that would extend overtime protection to millions of workers by increasing the salary threshold at which workers are eligible for overtime. NLC plans to file comments to the proposed changes.

The FLSA establishes minimum wage and overtime pay standards affecting workers in the private sector and in federal, state and local governments. As a general rule under the FLSA, unless they are exempt, workers must be paid at least one and one-half times their regular rate of pay for any hours they work beyond 40 in a work week. Under the "white collar" exemption, certain executive, administrative, and professional employees are excluded from the FLSA's minimum wage and overtime protections. To qualify for the exemption, a white collar employee "generally" must:

  1. be salaried; 
  2. be paid at least a specific salary threshold (currently $455/week or $23,660/ year) (salary threshold test); and
  3. primarily perform executive, administrative, or professional duties as provided in the Department's regulations (duties tests).

The proposed rule would nearly double the salary threshold at which workers would earn overtime pay whenever they worked more than 40 hours in a week. Last updated in 2004, the salary threshold would go from $23,660 a year to $47,892 a year. In the first year of its implementation, the Administration projects that 5 million more workers would become eligible for overtime pay. The number of workers in each state that would be affected by this proposal can be found here. For additional information about the proposed rule, click here.

Besides changes to the salary threshold test, the department is seeking comments on whether the current "duties tests" are working as intended to screen out workers who are not bona fide "white collar" exempt workers. It also seeks comments on the possibility of including nondiscretionary bonuses to satisfy a portion of the standard salary requirement. Comments are due on or before September 4, 2015.

To assist in developing and coordinating on our responses to this proposal, if your local government is considering filing comments in this proceeding and/or has collected information regarding the specific impact the changes would have on your local government, please send an email to coleman@nlc.org.

Senate Finance Working Group Report Maintains Status Quo For Tax Exemption

Priya Ghosh Ahola, 202.626.3015

Last week, the Senate Finance Committee released the reports from the five working groups established by the leadership of the Senate Finance Committee as it begins to examine the federal tax code. NLC was particularly interested in the report of the Infrastructure, Community Development and Energy working group's report related to the tax exemption for municipal bonds.

In March, Senator Michael Bennett (D-CO) invited NLC to participate in a roundtable discussion of the Senate Finance Committee's Infrastructure, Community Development and Energy working group.

Through its participation in the roundtable and in formal comments submitted to the committee, NLC underscored three priorities for local governments in the tax reform process: (1) maintaining the federal tax exemption on municipal bonds to promote job creation and improve the nation's infrastructure; (2) ensuring that state and local governments retain the authority to set their own tax policy; and (3) opposing federal pre-emptions that would grant preferential tax treatment to certain industries and threaten the fiscal health of state and local governments. NLC also reminded the Senate Finance Committee that, when considering any changes to the federal tax code, it is important to respect local authority and promote intergovernmental partnership by authorizing e-fairness or the collection of local taxes already owed to state and local governments on Internet and mail-order sales.

While the Infrastructure, Community Development and Energy working group's report highlighted the significant usage of tax exempt bonds with over $384 billion being issued between 2002 and 2011, there were no specific policy recommendations in the report regarding the tax exemption. While there were no recommendations in the report, NLC will continue to urge the preservation of the tax exemption in any federal legislation.

Following Supreme Court Decision on Fair Housing, HUD Finalizes New Rules

Mike Wallace, 202.626.3025

The U.S. Department of Housing and Urban Development (HUD) announced the release of a final rule to Affirmatively Further Fair Housing (AFFH). The new policy is intended to provide state and local governments with clearer guidelines, new tools, and data to meet fair housing obligations established in existing law. NLC previously commented on the rule in coalition with other local government group on the implications for local control. Community stakeholders, including local officials, have remained divided on the rule since it was first proposed two years ago. HUD has provided the following guidance on the new rule:

  • What the Rule Does: For HUD grantees, including cities receiving CDBG, the rule will mean replacing the existing Analysis of Impediments to Fair Housing Choice (AI) with a new Assessment of Fair Housing (AFH). The key differences are that HUD is providing data and a template for conducting a fair housing analysis, grantees will incorporate fair housing planning into the consolidated plan, and HUD will review assessments up front as part of the planning process. By making these changes, HUD can better partner with its grantees by providing a clearer path to meeting AFFH requirements, easing some of the burden of analysis by providing and packaging relevant data, and integrating fair housing into planning and investment strategies.
  • The rule will be implemented on a rolling basis. The due date for the first Assessment of Fair Housing (AFH) is 270 days prior to the program year that begins on or after January 1, 2017 (or January 1, 2018, depending on grantee type) for which a jurisdiction submits a new consolidated plan. HUD will also provide grantees at least 9 months from the publication of a final AFH Template applicable to the grantee type before the AFH is due.
  • Where to Find Additional Information: HUD will post the rule along with all official guidance and technical materials to the following HUD Exchange website: https://www.hudexchange.info/programs/affh/. In the coming weeks and months, HUD will continue to provide guidance and additional resources as well as information about training opportunities for grantees via the HUD Resource Exchange AFFH website. In addition, grantees will be able to pose specific questions through the "Ask A Question" feature on that website. 

Free Webinar August 19: Revising Sign Ordinances After Reed v. Town of Gilbert

Carolyn Coleman, 202.626.3023

In Reed v. Town of Gilbert the Supreme Court ruled that Gilbert's sign code violates the First Amendment. Many, if not most, communities must now revise their sign codes. Most sign codes apply different rules to different categories of signs based on content, which the Supreme Court now generally prohibits. Discuss the practical implications of this case for local governments with John M. Baker, Greene Espel.

After registering, you will receive a confirmation email containing information about joining the Webinar.

Revising Sign Ordinances After Reed v. Town of Gilbert
Wednesday August 19, 1:00PM - 2:15 PM EDT
Register Online Now

Proposed NLC Policy Resolutions and Amendments Due August 14

Carolyn Coleman, 202.626.3023

As part of its annual policy development process, NLC invites all member cities to submit National Municipal Policy (NMP) amendments and resolutions for consideration. The deadline for submissions is Friday, August 14.

Each proposed policy amendment or resolution should also include a document that provides background on the issue, as well as a discussion of its applicability to local governments nationwide.

The NMP is a permanent statement of NLC's position on federal policy matters that directly affect local governments. Resolutions address timely issues or specific pieces of federal legislation and are annual statements of position. Unless action is taken to renew a resolution or incorporate it into the NMP, each resolution expires at the Congress of Cities Conference following its adoption.

All proposals submitted by the deadline will be forwarded to the appropriate policy and advocacy steering committee for review. Upon further action, voting delegates will consider the committees' work at the Annual Business Meeting during NLC's Congress of Cities Conference in Nashville, Tenn., in November.

Proposed policy amendments and resolutions should be submitted in writing to Avery Peters via email at peters@nlc.org or mailed to him at the National League of Cities, 1301 Pennsylvania Avenue NW, Suite 550, Washington, DC 20004.

Make a Difference This Summer!

Angelina Panettieri, 202.626.3196

You don't have to come all the way to Washington to be an effective advocate. Before you head to the beach this summer, stand up for your city and lobby your members of Congress during their August recess.

Senators and representatives will be home for the month of August, and this is a great time to meet with your legislators and let them know how much your city needs e-fairness legislation. Spend time with your congressional delegation, and ask your senators to cosponsor S. 698, the Marketplace Fairness Act, and your city's representatives to cosponsor H.R. 2775, the Remote Transactions Parity Act.

It's easy to take action! Download our one-stop guide to meeting with your legislators at home to get started. Once you've gotten your meeting planned, download our one-page fact sheets on the Marketplace Fairness Act if you are meeting with a senator, or the Remote Transactions Parity Act if you are meeting with a representative.

Have a great meeting! Don't forget to share what you do - email us at advocacy@nlc.org with the details, take photos, and tweet using the hashtag #efairness.