Federal Advocacy Update: Week of April 9, 2019
In this issue:
- The SAFE Act Passes Out of Committee
- One Year Out, NLC Prepares for the Census
- Join the Conversation as Federal Transportation Negotiations Heat Up
- NLC, Partners Tell Federal Leaders to Empower Community Broadband
- NLC Submits Comments on SNAP Proposed Changes
- EPA Announces Water Infrastructure Funding Opportunity
- USDA to Begin Accepting Broadband Funding Pilot Applications
- CFBP to Host Local Government PACE Stakeholder Call
Brian Egan, 202.626.3107
On March 28, the House Financial Services Committee passed the Secure And Fair Enforcement (SAFE) Banking Act of 2019, which would carve out a safe harbor for financial institutions who provide services to cannabis related businesses acting in compliance with state and local laws. Last year, the cannabis industry ballooned to more than $10.8 billion in legal sales nationwide, and 68 percent of the American public now live in a state that has broadly legalized some form of cannabis. Despite this widespread proliferation of legal cannabis, banks continue to refrain from providing even basic financial services to cannabis related businesses for fear of legal exposure under anti-money laundering laws. As a result, an increasing number of local governments continue to face a rapidly-growing unbanked industry within their community.
The lack of access to credit and basic financial services negatively impacts municipalities by increasing the public safety and tax collection concerns associated with “cash-only” business models. As more than 13 state banking regulators stated last year, “barriers for financial institutions to serve marijuana and ancillary businesses creates a commercial condition lacking robust regulation and supervision and a diminished ability to identify operators acting to circumvent federal and state licensing and regulatory frameworks.”
While some financial institutions have chosen to provide services to cannabis related businesses, they do so at their own risk, and they do not resolve the challenges and threats posed to our communities and financial institutions under current law. The SAFE Banking Act would better allow banks to provide services to cannabis-related businesses by ensuring revenue derived from cannabis is permitted under federal banking law. Although the bill does not satisfy all NLC’s cannabis related concerns, it addresses the most significant one: the industry’s lack of access to safe, federally-regulated financial services.
On April 1, 2019, exactly one year before the 2020 Census, NLC joined with the Brookings Institution to discuss how cities, towns and villages can prepare today to ensure that their communities are accurately counted next year. The first panel covered the broader importance of the census to our country. Panelists also discussed some of the changes and challenges that will make this census unique, including the first online response opportunity and the uncertainty surrounding the citizenship question.
Our CEO and Executive Director Clarence Anthony moderated the second panel, which discussed the partnerships that local officials can make with businesses, non-profits and philanthropy groups to promote census awareness and participation, while elaborating on the challenges that local communities specifically face.
The census is vital to municipalities’ ability to serve their constituents. It provides the foundation for public health and safety programs, funding allocation, school resources, political representation, socio-economic research, infrastructure planning and more. Therefore, municipalities should take steps to prepare themselves to be counted. NLC has resources for municipal leaders to address challenges in order to ensure that their community is properly counted.
NLC also continued its opposition to the addition of an untested citizenship question by joining an amicus brief in support of the state and local defendants in the Commerce Department v. New York case. The brief echoes bipartisan sentiments that such an addition jeopardizes the fairness and accuracy of the census. The risk of an undercount in some or many of our communities poses a real threat to the ability of local governments to carry out their most basic functions. The Supreme Court plans to make a final ruling on the matter this term. NLC will continue to oppose its addition and will work to prepare municipalities on messaging in the event of a loss.
Brittney Kohler, 202.626.3164
Every few years, Congress reevaluates what transportation infrastructure is functioning properly and what systems need to be updated, and they can edit the federal transportation bill accordingly. Both the Senate and House have announced their intention to begin negotiations to reauthorize the Fixing America's Surface Transportation Act (FAST Act). The FAST Act will expire at the end of September 2020, and it must be renewed by Congress before then. Additionally, the funds that support FAST Act programs are dwindling, and the Highway Trust Fund will run out of funding shortly after, in 2021, which leaves little time for an extension. Congress’s early and proactive approach is a good sign that they intend to fund federal programs that matter most to our communities—the Surface Transportation Block Grants, TIGER/BUILD grants, Transportation Alternatives, Transit New Starts grants and more.
NLC wants to hear from local leaders about what federal funds communities are using and the important projects that cities, villages and towns need federal funding to complete. Join the conversation by filling out NLC’s transportation feedback form here.
By filling out the form, NLC can bring Congress a clearer sense of how to prioritize rebuilding with cities, towns and villages in the next version of the FAST Act, including a focus on investments that will benefit all communities and their residents.
Angelina Panettieri, 202.626.3196
During an event on March 27 in Washington, DC, local leaders urged federal and state officials to support community efforts to invest in publicly-owned broadband infrastructure. Participants gathered at NLC’s headquarters for a screening of Do Not Pass Go and a discussion among local leaders about the benefits of and obstacles to municipal broadband, held by NLC, Next Century Cities, the Institute for Local Self-Reliance and the National Association of Regional Councils.
Do Not Pass Go is a short documentary about Pinetops, North Carolina, which obtained cutting-edge broadband service when the municipal broadband utility in the neighboring city extended service into their town—an action later preempted by the state legislature. Suzanne Coker Craig, a former city commissioner in Pinetops, described lobbying against the state preemption during Hurricane Matthew, with the backing of her residents. “We had hundreds of signatures, and in Pinetops, ‘hundreds’ is a lot,” said Coker Craig. Ultimately, the legislature voted for preemption, and after a federal court battle, the municipal utility was forced to disconnect Pinetops from its network.
Previous Congresses have considered the Community Broadband Act, which would bar prohibitions on public or public-private broadband service. The bill has not yet been introduced in the 116th Congress. For more information about Do Not Pass Go, or to learn about hosting a screening locally, download this screening guide.
Stephanie Martinez-Ruckman, 202.626.3098
On April 2, the National League of Cities submitted comments to the U.S. Department of Agriculture, Food and Nutrition Service asking them to withdraw their proposed rulemaking to modify waiver standards in the Supplemental Nutrition Assistance Program (SNAP) as it pertains to requirements for able-bodied adults without dependents.
As written, the proposed rule would make it harder for states to receive waivers from existing SNAP work requirements. Under the current program, recipients who are classified as able-bodied adults without dependents are limited to three months of benefits every three years unless they work an average of 20 hours per week or more. Many states have been granted waivers that exempt them from this requirement based on areas with high unemployment rates.
As proposed, the current rule would negatively impact residents in cities, towns and villages across the country who have residents that depend on SNAP benefits for financial stability. While there remains concern about maintaining jobs and hours during challenging economic times, even during strong economic times, documenting work can be a roadblock to receiving benefits. While this process may appear straightforward, countless individuals who receive SNAP benefits do so with temporary employment status and/or encounter barriers that prevent them from maintaining work; these barriers include low educational attainment, criminal justice histories and caregiving challenges. There are also significant challenges in meeting the work requirements through volunteerism because documentation of what counts, who verifies it at the state level and how they verify it are all unclear. Should this proposed rule move forward, these restrictions would impede an individual’s ability to reach their full economic potential, place strain on local food pantries and cause long-lasting harm to local economies, including impacts on local grocery stores.
NLC opposed previous attempts to include similar language in the Farm Bill reauthorization last year and will continue to follow this important issue.
Carolyn Berndt, 202.626.3101
The U.S. Environmental Protection Agency (EPA) announced a new round of funding for water infrastructure projects under the Water Infrastructure Finance and Innovation Act (WIFIA). The availability of $6 billion in credit could finance over $12 billion in water infrastructure projects. Prospective borrowers seeking WIFIA credit assistance must submit a letter of interest by July 5.
WIFIA provides low-interest loans and loan guarantees for large water infrastructure projects of national or regional significance (projects of at least $20 million or $5 million for communities serving less than 25,000 people).
WIFIA credit assistance can be used for a wide range of projects, including:
- Drinking water treatment and distribution projects;
- Wastewater conveyance and treatment projects;
- Enhanced energy efficiency projects at drinking water and wastewater facilities;
- Desalination, aquifer recharge, alternative water supply, and water recycling project; and
- Drought prevention, reduction, or mitigation projects.
This year’s Notice of Funding Availability highlights the agency’s priority to finance projects that are ready for construction in three key areas: reducing exposure to lead and addressing emerging contaminants in drinking water systems, updating aging infrastructure and implementing water reuse and recycling. Learn more about how to apply for WIFIA assistance here.
Additionally, EPA has several resources to assist prospective borrowers, including:
- an updated Letter of Interest form,
- a Letter of Interest Example and Checklist,
- a Sample Financial Pro Forma,
- an updated WIFIA Program Handbook, and
- a Template Term Sheet.
Finally, EPA is hosting a series of information sessions and webinars to explain more about WIFIA financing. Upcoming webinars will focus on the process for submitting and evaluating WIFIA letters of interest. At the information sessions, attendees will learn about the program’s current status, eligibility and statutory requirements, application process, and financial benefits and flexibilities. Click here to register.
- Webinar: April 17, 2:00-3:30 pm Eastern Daylight Time
- Webinar: April 30, 2:00-3:30 pm Eastern Daylight Time
- Information Session: May 8, Atlanta, Georgia
- Information Session: May 13, Washington, DC
- Information Session: May 23, Phoenix, Arizona
Angelina Panettieri, 202.626.3196
The United States Department of Agriculture (USDA) has announced that it will begin accepting applications for its broadband funding pilot program, ReConnect, on April 23. Eligible applicants for the mix of grants and loans include cities, internet service providers and rural electric co-ops. Funded projects will be prioritized in areas with populations of less than 20,000 and where current broadband connections are below 10Mbps download/1Mbps upload. The funded broadband projects must be able to reach at least 25/3 Mbps, the current FCC standard.
Applications must be received by May 21 for grants, June 21 for loan and grant combinations and July 12 for loans. The agency is offering a slate of in-person and online technical assistance workshops for applicants, including an event on April 16-17 in Junction City, Kansas and April 23-24 in Welches, Oregon. A recorded technical assistance webinar is also available.
Carolyn Berndt, 202.626.3101
On April 10, at 2:00 PM EDT, the Consumer Financial Protection Bureau (CFPB) will host a conference call for local elected officials and city staff to provide information about the Bureau’s Advance Notice of Proposed Rulemaking on Property Assessed Clean Energy (PACE) Financing, answer questions and solicit initial feedback from local governments. To receive call-in information, please RSVP to Carolyn Berndt at email@example.com or 202-626-3101.
CFPF is seeking feedback on several aspects of PACE and has posed 34 questions in the proposal. The local government stakeholder call will focus on two specific questions that are most relevant for local governments, including:
- QUESTION 7: What is the role that states and local governments play in both the formation and underwriting of PACE financing?
- QUESTION 17: How does your city or county handle consumer repayment? For example:
- When does repayment begin after the financing agreement is signed?
- How frequently are payments made?
- Are payments roughly equal throughout a consumer’s full financing term, or can payments change? Are interest rates fixed or variable? Are balloon payments required? If so, in what circumstances? Do PACE financing agreements always provide for full amortization?
- To which parties do consumers make payments? Does the party to which consumers make payments ever change over the life of the financing agreement? If so, in what circumstances does this occur and why?
- After a consumer remits a payment, how is the payment distributed, and by whom?
- Please describe any changes to payments or payment processes when a consumer becomes delinquent or defaults.
- Please describe any differences to payments or payment processes when a consumer has a mortgage loan with an escrow account for taxes.
Additionally, NLC has identified several questions that local governments might be in the best position to answer, as outlined here.
To date, 36 states plus the District of Columbia have passed laws enabling local governments to develop PACE programs, and 20 states have active PACE programs. This rulemaking is especially relevant to California, Florida and Missouri who have active residential PACE programs, along with other states that are considering similar programs.
For additional background on PACE and the rulemaking, see the March 26 issue of the Federal Advocacy Update.