Federal Advocacy Update: Week of December 5, 2017

Inside view of Capitol Hill Dome
Inside view of Capitol Hill Dome

In this issue:

Tax Reform Continues to Race Forward

Brian Egan, 202.626.3107

A lot has happened in the past month on tax reform. On November 16, the House passed its version of a tax bill, the Tax Cuts and Jobs Act (H.R.1), just under a week after the Senate released its own version of the bill. After a tenuous 20 hours of debate and deal-making, the Senate too passed a version in the early morning of December 2. Now Congress has two versions of the bill, each with some marked differences.

Now, the bill moves to the Reconciliation Process, where a conference committee composed of five Senators and five Representatives will work to iron out the differences between the chambers. While the two versions have moved more closely in terms of city priorities, incongruences between the Senate and House bill in other areas will make the committee’s job of reconciling differences all the more difficult. Still, congressional leadership remains optimistic that they will send a bill to the President by the end of the year.

Below are some important differences for city leaders between the versions of the bills passed by both chambers:

  • Exemption for Interest Earned on Publicly Issued Municipal Bonds
    • House Version: Preserved
    • Senate Version: Preserved
  • Exemption for Interest Earned on Qualified Private Activity Bonds
    • House Version: Eliminated
    • Senate Version: Preserved
  • Exemption for Interest Earned on Advance Refunding Bonds
    • House Version: Eliminated
    • Senate Version: Eliminated
  • Deduction for Local Property Taxes
    • House Version: Capped at $10,000
    • Senate Version: Capped at $10,000
  • Deductions for Local Sales and Income Taxes
    • House Version: Eliminated
    • Senate Version: Eliminated
  • Historic Tax Credit (HTC)
    • House Version: Eliminated
    • Senate Version: Eligibility on construction costs reduced from 20% to 10%
  • New Markets Tax Credit (NMTC)
    • House Version: Eliminated
    • Senate Version: Preserved (until reauthorization)

There are a number of interests at play, but NLC will work throughout the reconciliation process to preserve the progress we’ve made, and to push for greater progress. NLC will pay special attention to preserving the tax exemption for all bonds, including Private Activity Bonds, which are only saved under the Senate version. Preserving the progress made on the state and local tax (SALT) deduction and pushing for its full preservation are also of key concern.

Given that the Tax Cuts and Jobs Act continues to fall short on critical issues for cities, including various forms of bonds, credits and state and local deductions, we stand ready to oppose the final bill, if it remains a bad deal for cities, when it goes back to both chambers. To track the status of city priorities throughout tax reform and to learn more visit www.nlc.org/taxreform.

More than 800 local leaders have already signed onto NLC’s action letter to Congress outlining our key priorities for tax reform and the upcoming expiration for the Continuing Resolution this week. Read the letter and add your name at www.nlc.org/StandWithCities.

Congressional Leaders Remain Undecided on CR

Yucel Ors, 202.626.3124

As the current continuing resolution to fund the government expires on December 8, House and Senate leaders have yet to reach consensus on how long a new continuing resolution should last - either for a few weeks in December or until sometime next year - but have floated a two-week extension. Key issues also remain unresolved in the appropriations battle, including funding for a border wall and a third disaster aid bill.

Meanwhile, last month, the Senate Appropriations Committee released two additional spending bills to fund the U.S. Department of Homeland Security (DHS), the U.S. Department of the Interior (DOI) and the U.S. Environmental Protection Agency (EPA). Subcommittee markups on either bill have not yet been scheduled.

The DHS funding bill would provide $1.6 billion to construct the 74 mile “border wall” along southern California and Texas. The bill also provides $2.849 billion for grants and training to state, local, tribal and territorial governments for terrorism prevention; firefighting equipment and hiring; and maintaining emergency management capabilities. The funds for transit and port security are cut by 40 to 50 percent, and pre-disaster mitigation grants are cut by 25 percent.

The Interior-Environment bill rejects many of the cuts proposed by the Administration and largely mirrors the House version, maintaining level funding from FY17 levels for the Clean Water and Drinking Water State Revolving Funds, the Water Infrastructure and Innovation Act (WIFIA), Brownfields and Superfund.

Additionally, the Senate bill, similar to the House bill includes a policy rider that would allow EPA to withdraw the 2015 Clean Water Rule (aka “waters of the U.S.”/WOTUS) without following the requirements of the Administrative Procedure Act and the requirement for a public notice and comment period. While NLC has concerns with the 2015 rule, and has advocated for a revision (see related WOTUS article), the ability of local officials to participate in the rulemaking process is a fundamental principle of the intergovernmental partnership.

For a complete breakdown of the funding levels for DHS, DOI, EPA and the other federal agencies, visit www.nlc.org/FY18Budget.

House Passes Brownfields Reauthorization

Carolyn Berndt, 202.626.3101

On November 30, the House passed the Brownfields Enhancement Economic Redevelopment and Reauthorization Act (H.R. 3017) by a bipartisan vote of 409-8. The bill reauthorizes the U.S. Environmental Protection Agency (EPA) Brownfields program, while making several key changes to assist with the cleanup and redevelopment of large, complex brownfields sites.

In a statement released following the vote, NLC stated, “We commend members of the U.S. House of Representatives for passing this important legislation in a bipartisan manner. It marks a critical step forward in providing local officials not only with the funding they need, but also the flexibility to tailor their brownfield redevelopment to meet the individual needs of their cities, counties and regions.”

Through testimony and letters of support, NLC advocated for increasing the single-site cleanup grant cap, authorizing multipurpose grants, and clarifying issues around municipal liability. Many of NLC’s recommendations are incorporated into the bill.

Specifically, the bill:

  • Authorizes multipurpose grants up to $1 million
  • Increases funding for remediation grants to $500,000, with the ability for EPA to go up to $750,000 per site
  • Allows up to 5 percent of grant amounts to be used for administrative costs
  • Addresses liability concerns for sites acquired prior to January 11, 2002
  • Addresses liability concerns for the “voluntary” acquisition of properties
  • Reauthorizes the program through 2022 and maintains the existing authorization level of $200 million

H.R. 3017 is sponsored by Reps. David McKinley (R-W.Va.), Greg Walden (R-Ore.), Frank Pallone (D-N.J.), John Shimkus (R-Ill.), Paul Tonko (D-N.Y.), Elizabeth Esty (D-Conn.), and John Katko (R-N.Y.).

In the Senate, similar legislation known as the Brownfields Utilization, Investment and Local Development Act (S. 822), passed the Environment and Public Works Committee in July but the timeline for bringing the bill to the floor is uncertain. S. 822 is sponsored by Senators James Inhofe (R-Okla.), Edward Markey (D-Mass.), Mike Rounds (R-S.D.), Cory Booker (D-N.J.), Angus King (I-Maine), Sheldon Whitehouse (D-R.I.), Thomas Carper (D-Del.), Kirsten Gillibrand (D-N.Y.) and Elizabeth Warren (D-Mass.).

City Representatives Defend Against Preemption in FCC Advisory Committee

Angelina Panettieri, 202.626.3196

City officials from California, Kansas, and Georgia met with government officials and industry representatives in Washington on November 9 to advocate in support of local authority during the most recent meeting of the Federal Communications Commission’s (FCC) Broadband Deployment Advisory Committee (BDAC). The BDAC, which was formed earlier this year, has been directed by the FCC to develop model state and local codes to promote broadband deployment, along with identifying state and local barriers to broadband deployment.

As noted by NLC and numerous city officials, as well as members of Congress, despite recent attempts to increase the number of local government officials on the BDAC, these officials are outnumbered by industry representatives within the group by a ratio of nearly ten to one.

Photos of City Representatives at the FCC

Larry Hanson, Executive Director of the Georgia Municipal Association, Shireen Santosham, CIO of the City of San Jose, Calif., Sam Liccardo, Mayor of the City of San Jose, Calif., and Andy Huckaba, Councilmember of the City of Lenexa, Kan. (from L-R)

During the daylong public meeting, the BDAC members reviewed and debated draft reports from working groups focused on developing model state and local codes, as well as identifying barriers to broadband deployment created by federal, state, and local government activity. Local participants highlighted the serious gaps created by only focusing on those barriers, and not issues like market forces, affordability, or lack of technical skills that may prevent broadband from reaching all city residents. They also discussed the need for clarity of terminology around new wireless technologies, how to incentivize the development and deployment of less-intrusive broadband infrastructure, and above all, the need to avoid preemption of traditional state and local regulatory authority.

Draft materials from all working groups are available on the BDAC’s web page and are available for public comment under FCC docket GN 17-83. NLC plans to provide feedback on these materials. The BDAC is expected to meet in Washington, D.C. again on January 23 for a vote on final versions of the working group reports.

First House Drone Hearing Shows Need to Find a “Sweet Spot” for Local Input

Brittney Kohler, 202.626.3164

Members of the House Transportation and Infrastructure Aviation Subcommittee held their first hearing on November 29 on safely integrating drones into the nation’s airspace. Members pushed for answers from the Federal Aviation Administration (FAA) on the slow progress to set standards for remotely identifying and tracking drones. A remote identification rule from FAA would give law enforcement a clearer picture of who is flying and how to handle drone operations, and FAA reiterated their commitment to finishing it.

Additionally, Rep. Jason Lewis (R-Minn.) echoed NLC’s concerns about preemption of localities from providing reasonable time, place, and manner direction on drone operations in their areas. Many of the witnesses and Members expressed agreement that we must “find the sweet spot” for local government within this new and exciting industry. Given recent drone incidents in San Francisco, Arkansas and Seattle, the need to organize at both the national and local levels is clear.

Cities Call on Congress to Preserve Local Authority in Broadband Deployment

Angelina Panettieri, 202.626.3196

On November 16, Chief Innovation Officer Shireen Santosham of the City of San Jose, Calif., testified before the House Energy and Commerce Committee Subcommittee on Communications and Technology on the importance of involving cities in efforts to leverage the promise of new wireless technologies, such as 5G.

In her testimony, Santosham highlighted the role that technology has played in San Jose and the city’s efforts to improve opportunity for its residents. She focused on the duty city leaders have to ensure that deployment of new technologies like 5G is equitably distributed among city residents, and to combat practices such as digital redlining that deliver better service to wealthier residents, while leaving underserved residents further behind in the digital divide.

CIO Shantosham testifying before Congress

She also discussed federal policy lessons that can be drawn from recent state policy debates over small cell wireless infrastructure in the California State Legislature. In particular, Santosham emphasized that while cities must update their own policies to adapt to technological changes, wireless providers must work with cities to minimize the impact of their infrastructure on physical streetscapes, and adequately compensate cities for the use of public property. Above all, local governments reflect the needs and desires of their residents, and must not be preempted as they work to appropriately manage the use of public assets and protect residents.

Upcoming EPA Webinar on Status of WOTUS Rule

Carolyn Berndt, 202.626.3101

The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) will host a webinar for state and local governments to hear an update on the agencies’ progress toward updating the definition of “waters of the U.S.” on December 12 from 1-2 pm EST. To register, click here.

The EPA is currently undertaking a two-step approach to rescind and revise the 2015 Clean Water Rule (aka “Waters of the U.S.” or “WOTUS”). In June, NLC submitted comments to the agencies highlighting key recommendations for consideration as the agencies move forward with revising the “Waters of the U.S.” rule. In addition, in September, NLC submitted comments to the agencies on a proposed rule to rescind the WOTUS rule, highlighting some of the challenges for local governments in reverting back to the previous definition of a “waters of the U.S.” The agencies expect to complete actions on these two steps in spring 2018.

Due to continued court action on the 2015 Clean Water Rule, the agencies recently announced a proposed rule to amend the effective date of the 2015 rule. Under this proposed rule, the Clean Water Rule would go into effect two years after the proposed rule is finalized and published in the Federal Register. The agencies are accepting public comments until December 13 and expect to take final action by early 2018.

Senate AV Legislation Moves Closer to a Vote

Brittney Kohler, 202.626.3164

The Senate Commerce committee released a report on November 28 to accompany their autonomous vehicles bill, The American Vision for Safer Transportation through Advancement of Revolutionary Technologies Act or the “AV START Act” (S. 1885). NLC worked closely with Senate staff to ensure that our chief concern – how performance would be interpreted when software instead of humans are driving – was given more context in the bill report.

NLC will be watching closely as the Senate tries to schedule a vote on the AV START Act, but with passage expected soon, cities should start preparing now for more autonomous vehicles to be testing on their roads in the coming years. 

FCC Proposes Net Neutrality Rollback

Angelina Panettieri, 202.626.3196

On November 22, Federal Communications Commission (FCC) Chairman Ajit Pai announced plans to roll back net neutrality regulations. The current regulations, which were adopted by the FCC in 2015, classified internet service as a “telecommunications service,” and required that all internet traffic be treated equally, without blocking, throttling (slowing down), or paid prioritization (so-called “fast lanes”) of certain services or websites.

The FCC is expected to approve this rollback plan during its open meeting on December 14. The proposal, which includes a new preemption provision to prohibit state and local net neutrality regulations, would potentially harm local broadband choice and consumer protection.

For more information on how the net neutrality order affects cities and how city leaders can respond, visit NLC's blog, CitiesSpeak.

NLC Supports New Bipartisan Smart Cities Legislation

Brittney Kohler, 202.626.3164

Several members of Congress would like to see the U.S. Department of Transportation’s (USDOT) prior “Smart Cities” initiative become permanent so that cities can compete for federal funds to start innovative and transformative transportation projects.

In late October, two bipartisan Smart Cities bill were introduced: The STREET Act (H.R. 4151), introduced by Reps. Comstock (R-Va.) and Esty (D-Conn.), which would bill to promote the use of smart technologies and systems in communities; and The Smart Cities and Communities Act (S. 1904/H.R. 3895), introduced by Sen. Maria Cantwell (D-Wash.), Rep. Suzan DelBene (D-Wash.), and Rep. Ben Ray Luján (D-N.M.).

These were followed by the introduction of the Moving and Fostering Innovation to and Smarter Transportation (FIRST) Act (Moving FIRST Act; S.1809/H.R. 3901), introduced by Sen. Cortez Masto (D-Nev.), Rep. Smucker (R-Pa.) and Sen. Burr (R-N.C.). NLC is supporting each of these bills to provide cities more opportunities to invest in infrastructure technology projects that tackle their most pressing needs.

December 15 Deadline for 2018 Health Coverage Enrollment

Stephanie Martinez-Ruckman, 202.626.3098  

Friday, December 15 is the deadline to enroll, re-enroll or change an insurance plan through the Health Insurance Marketplace for coverage in 2018.  Please utilize the next few days to promote this application deadline to your community through a press conference, op-ed or social media to ensure that all residents are aware of this year’s deadline.  In your messaging, please direct individuals to HealthCare.gov for all enrollment materials and to sign up.

To help publicize the end of the enrollment period, below is sample language to be used on social media.

  • Time is running out for you to sign up for 2018 health coverage. Head over to HealthCare.gov today before the December 15 deadline.

There are a few exceptions for which this deadline for enrollment does not apply.  Those who qualify for Medicaid or the Children’s Health Insurance Program (CHIP) can apply at any time.  Additionally, those who experience a lift event such as loss of coverage, getting married or having a baby, may qualify for a Special Enrollment Period.  But, for the vast majority of your constituents, the deadline will be December 15.

Program Area
Related Topics