Federal Advocacy Update: Week of June 18, 2019

Internal view of the Cannon House Office Building
Internal view of the Cannon House Office Building

In this issue:

Take Action on Workforce Development!

Stephanie Martinez-Ruckman, 202.626.3098 and Zachary Gossett, 202.465.2520

Ask your members of Congress to cosponsor the Building U.S. Infrastructure by Leveraging Demands for Skills Act (BUILDS Act)—H.R. 2831 and S. 1517. Send tweets to your members of Congress and thank the original cosponsors here

By creating a pipeline of skilled and trained workers, the BUILDS Act is a critical component of any infrastructure package that aims to rebuild and reimagine America’s roads, bridges, water and broadband. 

NLC sent this letter to endorse the act and thank the original cosponsors for their leadership.  

Does the BUILDS Act mean a lot to your city, town or village? Email Stephanie to get more involved!

White House and Congress Resuming Bipartisan Talks to Prevent FY20 Government Shutdown

Michael Wallace, 202.626.3025

Administration officials and congressional leaders are resuming efforts this week to reach a top level spending deal for Fiscal Year 2020 (FY20). U.S. Treasury Secretary Steven Mnuchin, who is reportedly leading negotiations for the White House, is scheduled to meet with House leaders—including Speaker Nancy Pelosi (D-CA-12) and Minority Leader Kevin McCarthy (R-CA-23)—and Senate leaders, including Majority Leader Mitch McConnell (R-KY) and Minority Leader Chuck Schumer (D-NY).

The two immediate tasks before them are reaching consensus on overall defense and non-defense discretionary spending levels and raising the federal debt limit to prevent the possibility of default on national debt. Failure on either task would significantly impact cities. According to Fitch Ratings, the twin possibilities of another government shutdown and default on the federal government’s obligations could lower the country’s Triple-A credit rating. Should that happen, not only would federal assistance for cities fall but also borrowing costs would rise as a result of spiking interest rates.

Although the president’s position is unclear, reports suggest the Administration supports a one-year continuing resolution that would keep funding levels generally flat. Congressional leaders have indicated support for another two-year spending deal that would allow for yet-to-be-determined increases in defense and non-defense spending. NLC is urging Congress to reach a two-year bipartisan spending deal that lessens any possibility of another government shutdown over that term.  

The House Appropriations Committee is proceeding regardless of current leadership talks. The committee has approved an overall allocation of $1.295 trillion in discretionary spending for FY20, which would permit modest increases for most federal agencies including a 7% increase for both the Transportation, Housing, and Urban Development appropriations bill and the Labor, Health and Human Services, and Education appropriations bill. For cities, towns and villages facing growing demands for both housing and infrastructure, the proposed increases are a welcome development.  

It is unclear, however, if the spending levels approved in the House would have enough support to pass in the Senate. So far, the Senate appears to be waiting to see if an overall spending deal can be struck before advancing any FY20 spending bills.

NLC is continuing to track budget and appropriations developments on our website. You can find the latest specific funding proposals by program here.

Thune, Schatz Reintroduce STREAMLINE Act to Preempt Local Small Cell Authority

Angelina Panettieri, 202.626.3196

Senators John Thune (R-SD) and Brian Schatz (D-HI) have reintroduced the Streamlining The Rapid Evolution And Modernization of Leading-edge Infrastructure Necessary to Enhance Small Cell Deployment Act (STREAMLINE Small Cell Deployment Act)—S. 1699—despite opposition from state and local governments. The bill would enshrine in statute many of the preemptions created by the September 2018 FCC order limiting local authority over small cell wireless deployments in public rights of way. 

However, the bill would also impose a “deemed granted” provision, in which wireless siting applications would automatically be approved if a local government missed application review deadlines.
NLC, along with numerous state and local government organizations, opposed this bill during the previous Congress and will continue to work to defeat it. For a template letter to send to your senators opposing the bill, click here—if you send a letter this way, please send a copy to Angelina. To send an email directly to your senators through NLC’s message system, click here.

IRS Finalizes Rules on SALT Credits

Brian Egan, 202.626.3107

On June 11, the Internal Revenue Service (IRS) released final regulations on the federal deductibility of charitable contributions if the taxpayer receives corresponding state/local tax credits. The final rules largely mirror those proposed late last summer. IRS issued the initial proposal as a response to several states authorizing or expanding state charitable tax credit programs in the wake of the $10K cap to the state and local tax (SALT) deduction imposed by the Tax Cuts and Jobs Act (TCJA). While the measure primarily targeted these state actions, it applies to all state/local tax credits, including those for contributions to schools, public safety funds and land conservation efforts.
Under the new rules, taxpayers will need to subtract the value of state/local tax credits from their charitable deductions on federal tax returns, if the state and local credits are worth more than 15 percent of the value of the contribution. For example, if a $1,000 donation comes with a $600 local credit (a 60 percent credit), the taxpayer will only be able to write off $400 worth of the contribution on their federal taxes. However, the proposal will not change the value of federal charitable deductions that are coupled with state/local deductions. IRS also issued a Notice of Proposed Rulemaking (Notice 2019-12) to provide a safe harbor that would allow taxpayers to count the newly disallowed portions of a charitable deduction toward their SALT deduction, assuming it remains under the $10K cap. 
The new rules overturn the longstanding precedent that a taxpayer's receipt of a state/local tax credit was not a source of income, but rather a state or local government using its authority to adjust a resident's tax liability. NLC reiterated concerns of local control and unintended consequences of such a drastic course change in our comments submitted to IRS last fall. NLC continues to support efforts to remove the $10K cap on the SALT deduction and protect local decision making when it comes to setting local tax rates. 

House Hearing on FEMA’s Readiness for Future Disasters

Yucel Ors, 202.626.3124

On June 12, the U.S. House Homeland Security Committee held a hearing titled, “Assessing FEMA’s Readiness for Future Disasters.” With increasing number of disasters hitting communities across the country, the hearing looked to examine FEMA’s ability to respond to and provide recovery assistance for future disasters. Members of Congress questioned Peter Gaynor, Acting Administrator of FEMA, about recent reports by the Government Accountability Office (GAO) that criticized the agency’s slow response and staffing challenges that have plagued the agency’s ability to properly deal with the ongoing recovery efforts resulting from large number of natural disasters that occurred over the past couple of years.  

NLC submitted comments to the Committee which stated, “NLC recognizes that the federal government’s ability, including FEMA, to help local governments recovery quickly after a disaster has been severely impacted by the sheer number of disasters that have occurred over the past couple of years. Delays in federal assistance is putting the recovery efforts in cities, towns and villages that have been hit the hardest by the recent disasters in jeopardy. Without immediate federal support, the losses to the local economy, jobs, and population mean it will take these communities much longer to recover and rebuild.” The statement also urged “the federal government to change the way our nation sets its federal investment priorities. Resilience and sustainability of critical lifelines and services to communities should be a top priority to help protect communities from future disasters. Building infrastructure to withstand future devastation caused by climate change will not only save taxpayers money, it will ensure communities and their economies will recover quickly after a disaster.”  Click here to view full comments.

EPA Issues Proposed Rule for Perchlorate in Drinking Water

Carolyn Berndt, 202.626.3101

On May 23, the U.S. Environmental Protection Agency (EPA) issued a notice of proposed rulemaking seeking public input on a range of options regarding the regulation of perchlorate in public drinking water systems. 

The agency is seeking comment on a proposed National Primary Drinking Water Regulation for perchlorate to establish a Maximum Contaminant Level (MCL) and a health-based Maximum Contaminant Level Goal (MCLG) at 56 micrograms per liter. 

In addition, the agency is seeking comment on three alternative regulatory options:
•    a MCL and MCLG for perchlorate set at 18 micrograms per liter,
•    a MCL and MCLG for perchlorate set at 90 micrograms per liter,
•    withdrawal of the agency’s 2011 determination to regulate perchlorate in drinking water.

The agency is requesting comment on all relevant aspects of the proposed rule but is especially interested in the perchlorate monitoring and reporting requirements for public water systems and a list of treatment technologies that would enable water systems to comply with the MCL, including affordable compliance technologies for small systems serving 10,000 persons or less.

Perchlorate is a manufactured chemical ion commonly used as an oxidizer in rocket propellants, munitions, fireworks, airbag initiators for vehicles, matches, and signal flares. It is also naturally occurring in some fertilizers. Perchlorate is highly soluble and dissociates completely, making it difficult to remove from water. 

In 2011, EPA determined that perchlorate meets the Safe Drinking Water Act criteria for regulation as a contaminant. The agency found that perchlorate may have an adverse effect on human health and is known to occur in public drinking water systems with a frequency and at levels that present a public health concern.

With this determination, EPA was required to promulgate a final rule by August 2014. In 2016, a lawsuit was filed against the agency for failure to meet that deadline. Currently, EPA is under a consent decree that requires the agency to finalize a rule by December 19, 2019. 

On June 5, EPA held a briefing for state and local government groups on the proposed rule. EPA will accept public comment on the proposed rule for 60 days following publication in the Federal Register. NLC will likely submit comments. If your city has any information to share about how this proposed rulemaking could affect your city, please contact Carolyn.

Delivery Drones, Unauthorized Drones and New FAA Advisory Committee Take Off

Brittney Kohler, 202.626.3164

Across the country, pilot drone projects with the Federal Aviation Administration (FAA) are opening up new opportunities for uses—Google Wing will begin local deliveries in Blacksburg, Virginia; Uber will deliver McDonalds in San Diego; and UPS in Raleigh, North Carolina, will speed deliveries at WakeMed Hospital. While these are pilots, the FAA is working to advance the rules passed by Congress so that drone flights can take off anywhere in the United States in a global race to catch up with Australia and Japan. The FAA’s work is being advised by the Drone Advisory Committee where NLC has a seat at the table with Wade Troxell, Mayor of Fort Collins, Colorado. 

On June 6, the Drone Advisory Committee (DAC) met for the first time in over a year. DAC is made up of representative stakeholders from the industry and government to advise the FAA on critical issues like how local police will identify and engage with drones, who has authority to take drones out of the sky, and how city departments and emergency responders will be licensed to use drones in the near future. The Committee leaders are setting a robust schedule for a 90-day response on a Remote ID rule which should allow for identification of the drone operator. This will be a huge step forward for law enforcement to assess between the clueless, the careless and the criminal operator. This is top of mind for cities, airports and the FAA after three major incidents—a 33-hour Christmas travel shutdown at London’s Gatwick airport affecting 140,000 passengers; a unauthorized drone hovering over Fenway Park in Boston in April, and most significantly, in Atlanta at the Superbowl federal officials with designated authority used counter-drone tools and still could not keep all the drones out of the “No Drone Zone.”

NLC will continue to be on the forefront of the drone issue to both embrace the potential in our skies and advocate for the role of cities, towns and villages as new rules are developed. If your city is interested in drones or considering a change to local ordinances, reach out to Brittney Kohler so you can be added to our list of cities for early information. 

FCC Rules on Robocalling Prevention

Angelina Panettieri, 202.626.3196

During its June Open Meeting, the Federal Communications Commission (FCC) approved an order enabling telephone providers to block suspected illegal robocalls. The order allows, but does not require, phone service providers to enroll customers in robocall-blocking services. The order stopped short of a larger reconsideration of the legal framework around robocalls, and which calls should be legally allowable. 

Democratic FCC Commissioners Geoffrey Starks and Jessica Rosenworcel have raised concerns that the order does not go far enough, and robocall blocking services should be provided to consumers for free by telecom providers. During their vote statements at the FCC meeting, and during a June 12 oversight hearing, both commissioners said that they plan to continue pushing for robocall blocking services to be made available for free to consumers. Commissioner Rosenworcel also noted during the oversight hearing that Congress is also considering action to limit robocalls. Last month, the Senate passed the Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act, which would require telephone service providers to implement certain call blocking technologies, direct the FCC to promulgate rules around use of that technology, and establish an interagency working group to improve enforcement of existing robocalling laws and penalties. The House Energy and Commerce Committee is expected to take up this legislation, which passed with bipartisan support in the Senate, and pass it out of committee quickly.

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