Federal Advocacy Update
In this issue:
- EPA Releases Final "Waters of the U.S." Rule
- Preemption of Local Authority on Internet Taxation Legislation Headed to House Floor Next Week
- The E-Fairness Hearing That Never Was
- Supreme Court Rules Motive and Knowledge Not the Same in Religious Accommodation Case
- New Report on Sharing Economy Finds City Leaders Support Ridesharing, Are Concerned about Safety
- Free Webinar: State and Local Legal Center Supreme Court Review
- July 15: Supreme Court Employment Cases Webinar
Carolyn Berndt, 202.626.3101
Last week, the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) released the final "waters of the U.S." rule to clarify which waters fall under federal jurisdiction of the Clean Water Act (CWA). The rule will be effective 60 days after publication in the Federal Register.
Under the final rule, "waters of the United States" means:
- All waters which are currently used, were used in the past, or may be susceptible to use in intestate or foreign commerce, including all waters which are subject to the ebb and flow of the tide; (commonly referred to as "traditional navigable waters")
- All interstate waters, including interstate wetlands;
- The territorial seas;
- All impoundments of waters otherwise identified as waters of the United States;
- All "tributaries" of waters identifed in 1-3 above;
- All waters "adjacent" to a water identified in 1-5 above, including wetlands, ponds, lakes, oxbows, impoundments, and similar waters;
- Waters including Prairie potholes, Caroline bays and Delmarva bays, Pocosins, Western vernal pools, and Texas coastal prairie wetlands where it is determined, on a case-specific basis, to have a "significant nexus" to a water identified in 1-3 above;
- All waters located within the 100-year floodplain of a water identified in 1-3 above and all waters located within 4000 feet of the high tide line or ordinary high water mark of a water identified in 1-5 above where they are determined on a case-specific basis to have a significant nexus to a water in 1-3 above.
The final rule includes definitions of "tributary," "adjacent," and "significant nexus," among others. This new definition of "waters of the U.S." has the potential to expand the number of waterbodies that are federally regulated under the CWA.
Among the most significant changes from the proposed rule is an exclusion for "stormwater control features constructed to convey, treat, or store stormwater that are created in dry land." The possibility that water conveyances, including but not limited to MS4s could meet the definition of a "tributary" under the proposed rule and thus be jurisdictional as a "waters of the U.S." was one of NLC's top concerns with the proposed rule.
While the language establishes a broad categorical exclusion, it does not apply to stormwater control features that were built on wet land or if the features are part of a traditionally navigable water, interstate waters or the territorial seas. For example, the exclusion may not apply to infrastructure in coastal or low-lying areas. Additionally, some features, such as channelized or piped streams, would be jurisdictional.
While the final rule does not include a specific exclusion for green infrastructure as NLC had requested, the preamble states, "this rule is designed to avoid disincentives to [the] environmentally beneficial trend in stormwater management practices"-using green infrastructure to manage stormwater at its source and keep it out of the conveyance system.
The exclusion for stormwater control features "is intended to address engineered stormwater control structures in municipal and urban environments-those that address runoff that occurs during and shortly after precipitation events; as a result stormwater features that convey runoff are expected to only carry ephemeral or intermittent flow."
The final rule also includes an exclusion for wastewater management systems, as NLC requested. The exclusion covers "wastewater recycling structures constructed in dry land; detention and retention basins built for wastewater recycling; groundwater recharge basins; percolation ponds built for wastewater recycling; and water distributary structures built for wastewater recycling." As with MS4s, the concern with the proposed rule was that water deliver and reuse facilities could be considered a "tributary" and therefore jurisdictional.
It is important to note that even if stormwater and wastewater infrastructure are not considered a "waters of the U.S.," they may still be regulated as a point source under the CWA Section 402 permit program.
NLC continues to review and analyze the final rule. This chart details a preliminary analysis covering NLC's specific concerns with the proposed rule. EPA will host a webinar on Thursday, June 11 from 1-2:30 p.m. EDT providing a broad overview of the final rule. You must register in advance to attend this webinar.
Julia Pulidindi, 202.626.3176
Next week, the full House is expected to consider H.R. 235, the Permanent Internet Tax Freedom Act (PITFA). As it has for years, NLC continues to vigorously oppose this legislation because it would preempt local authority to tax Internet access. Currently, a temporary ban blocks local governments from doing this except for in a handful of states. The temporary ban is set to expire on October 1, 2015, and this legislation would make the ban permanent for all states.
In general, taxation of Internet access refers to applying state and local taxes to the monthly charge that subscribers pay for access to the Internet through an Internet Service Provider. The original intent of the Internet Tax Freedom Act in 1998 was to encourage development of the Internet, which at the time was a new technology. This justification is no longer applicable given the substantial advancements in technology that have occurred since. A permanent tax moratorium on Internet access will result in increasing amounts of lost revenue on which state and local governments rely to fund essential services in their communities, like firefighters and police officers, schools, parks, libraries and continued investments to address aging infrastructure.
NLC urges you to contact your Representative and ask that they vote against H.R. 235, the Permanent Internet Tax Freedom Act.
Priya Ghosh Ahola, 202.626.3015
The House Judiciary Committee's Regulatory Reform, Commercial and Antitrust Law Subcommittee held a hearing this week on three tax bills: the Business Activity Tax Simplification Act (BATSA, scheduled for introduction on Monday June 8 by Rep. Chabot), the Mobile Workforce State Income Tax Simplification Act (H.R. 2315), and the Digital Goods and Services Tax Fairness Act (H.R. 1643). The common thread throughout the discussion was the issue of nexus or what should be considered a "sufficient physical presence" standard in these tax bills. This same question of how much nexus is sufficient is also a central issue to resolving the remote online sales tax collection issue.
The question of sufficient nexus is important since it is a threshold inquiry for purposes of establishing, among other issues, whether a state can compel out of state online retailers to collect sales or use taxes from in-state purchasers.
Despite the obvious connection between the main topic at the hearing and e-fairness or Market Place Fairness, it was conspicuously missing from the hearing. This omission did not deter supporters of e-fairness, both from the panel of tax experts and supporters on the Subcommittee itself, from using the opportunity to advocate for resolution of the issue or passage of the legislation. NLC also took advantage of the opportunity to raise its concerns with the bills on the agenda and to chastise the committee for the missed opportunity to give e-fairness a hearing.
Carolyn Coleman, 202.626.2023
In EEOC v. Abercrombie & Fitch Stores the Supreme Court held 8-1 that to bring a religious accommodation claim an applicant or employee need only show that his or her need for a religious accommodation was a motivating factor in an employment decision. NLC joined in an amicus brief filed by the State and Local Legal Center (SLLC) arguing that to bring a failure to accommodate claim the applicant/employee should have to notify the employer of the need for a religious accommodation.
Abercrombie & Fitch refused to hire Samantha Elauf because she wore a headscarf to her interview. Abercrombie suspected she wore it for religious reasons but she did not ask for an accommodation. The EEOC sued Abercrombie alleging it violated Title VII by failing to accommodate Elauf's religious beliefs.
The Court concluded that to bring a religious accommodation claim an applicant/employee need not show that the employer had "actual knowledge" of the need for an accommodation. Instead the employee/applicant only must show that his or her need for an accommodation was a motivating factor in the employer's decision. Title VII prohibits employers from taking an adverse employment action "because of" religion. While "because of" usually means but-for causation, Title VII has a more relaxed standard that prohibits even making religion a motiving factor in an employment decision. Simply put, the Court would not add an "actual knowledge" requirement to Title VII.
According to the Court, while a knowledge requirement could not be added to the motive requirement, arguably the motive requirement cannot be met unless the employer at least suspects the practice in question is religious. Here Abercrombie at least suspected Elauf wore a head scarf for religious reasons so the Court did not decide whether the motive requirement could be met without knowledge. Justice Alito, in a concurring opinion, stated that the Court should have decided this question--in the negative.
The growing sharing economy is impacting cities as innovative companies are providing improvements to service efficiency and on-demand information. NLC this week released the first national quantitative survey of local elected officials' views on the sharing economy. The report, City Survey on the Sharing Economy: Shifting Perceptions of Collaborative Consumption, found that 71 percent of cities surveyed are supportive of growth in the sharing economy - particularly with ridesharing services such as Uber and Lyft - but many are concerned about the sharing economy's impact on public safety. On the whole, cities want to encourage economic development and accommodate the services their constituents want. The report was released in conjunction with an animated video: "Cities, The Sharing Economy, and What's Next."
"Cities make the sharing economy work," said National League of Cities President Ralph Becker, mayor, Salt Lake City. "It's clear that city leaders understand that their communities demand the innovative services provided by the sharing economy."
The survey found that city leaders are open to integrating sharing economy services more fully within their communities - and they want to capitalize on this opportunity. At the same time, the survey found that cities do have concerns with the sharing economy. Many cities are working through these challenges because they want to reflect resident demands and benefit from the sharing economy's economic impact. The majority of respondents acknowledged the importance of developing new policies on the sharing economy, and placed ridesharing front and center as the top priority in the policy arena.
City Survey on the Sharing Economy: Shifting Perceptions of Collaborative Consumption builds on NLC's work to help city leaders understand and benefit from the sharing economy.
- Cities, the Sharing Economy, and What's Next features interviews with city officials on the impact of the sharing economy and related topics centered around five key themes: innovation, economic development, equity, safety and implementation.
- The Sharing Economy: An Analysis of Current Sentiment Surrounding Homesharing and Ridesharing presents a typology for measuring the sentiment of cities toward homesharing and ridesharing services.
Carolyn Coleman, 202.626.2023
For state and local government, this Supreme Court term runs the gamut from same-sex marriage to the Affordable Care Act, from Medicaid to the Fair Housing Act, from the First Amendment to the Eighth Amendment. Discuss the significant cases affecting state and local government with John Bursch, Warner Norcross & Judd, Appellate and Supreme Court Practice Co-chair, who argued the same-sex marriage case on behalf of Michigan, Joe Palmore, Morrison & Foerster, Appellate and Supreme Court Practice Co-chair, and Tony Mauro, Supreme Court Correspondent, The National Law Journal/ Legal Times/ ALM.
The State and Local Legal Center will offer separate webinars covering the Supreme Court's police cases, tax cases, employment cases, and its sign case, Reed v. Town of Gilbert, Arizona.
SLLC Supreme Court Review Webinar
Wednesday, July 22nd, 1:00PM - 2:30PM EDT
Carolyn Coleman, 202.626.2023
The State and Local Legal Center (SLLC) will host a webinar on Wednesday, July 15 at 1:00PM EDT on recent employment cases decided by the Supreme Court. While the Supreme Court decided no public employment cases this term, all four of the employment cases decided affect all employers-including state and local governments. Shay Dvoretzky, Jones Day, who argued EEOC v. Abercrombie & Fitch (religious accommodation), will discuss how that case and Integrity Staffing Solutions v. Busk (FLSA), Young v. UPS (PDA), and Mach Mining v. EEOC (EEOC conciliation) impacts state and local government employers. The potential impact on state and local governments of M&G Polymers v. Tackett (retiree health benefits) and Tibble v. Edison (fiduciary duty retirement benefits) also will be covered.
SLLC Employment Cases Webinar
Wednesday, July 15th, 1:00PM - 2:30PM EDT