Federal Advocacy Update: Week of June 19, 2018

U.S. Capitol Building Dome with American Flag
U.S. Capitol Building Dome with American Flag

In this issue:

FY19 Appropriations Advancing but Rescission Vote Could Upend Progress

Michael Wallace, 202.626.3025

The Senate Appropriations Committee has already approved seven of the 12 annual spending bills necessary to keep the government operating in Fiscal Year (FY) 2019. Under regular order, Congress needs to approve and send all 12 bills to the President before the new fiscal year begins on October 1. If they miss the deadline, Congress will have to consider a series of politically-charged, short-term continuing resolutions to prevent another government shutdown through the midterm elections. The full Senate will begin voting on Appropriations bills this week.

Also looming this week is a Senate vote on the President’s rescission proposal, which would claw back certain unspent federal funds allocated in previous years. The proposal barely passed the House last week by a vote of 210-206. Approximately half of the claw back would come from funds allocated to the Children’s Health Insurance Program (CHIP). NLC is opposing the rescission proposal because it includes, among other things, funds allocated for public housing, transit, and economic development. The rescission proposal does not include any current federal funding allocated for FY18, so cities will not “feel” impact of this rescission bill if it passes. However, NLC is urging Congress to reallocate any unspent funds from previous years to productive programs, including those that fund infrastructure, which remains a White House priority. If the Senate takes up the rescission bill this week, it could pass with a simple majority. However, leaders in both parties have expressed skepticism of the proposal, including Senate Transportation-Housing Appropriations Chair Susan Collins (R-ME) and Senate Interior Appropriations Chair Lisa Murkowski (R-AK).

City leaders can track the development of the FY19 spending bills by visiting NLC’s Budget Tracker, which tracks dozens of federal programs important to cities across all federal agencies.  Among the most recent developments:

Energy-Water

On June 8, the House approved a “mini-bus” package of three FY19 appropriations bills, including the Energy-Water; Military Construction and Veterans Affairs; and Legislative Branch Appropriations Act. The Energy-Water spending bill to fund the U.S. Department of Energy (DOE) and the U.S. Army Corps of Engineers, which passed the committee on May 16, largely rejects the President’s proposed cuts, providing level funding at $251 million for the Weatherization Assistance Program and $2.1 billion for the Office of Energy Efficiency and Renewable Energy, a decrease of $200 million over FY18. The bill includes several policy riders, including one to repeal the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers Clean Water Rule. 

Meanwhile, the Senate Appropriations Committee passed its spending bill on May 24, and the Senate is scheduled to take the bill up as part of a similar “mini-bus” package the week of June 18. The Senate bill maintains level fund compared to FY18 levels for the Weatherization Assistance Program and the Office of Energy Efficiency and Renewable Energy. It does not include the Clean Water Rule policy rider. 

Interior-Environment

On June 6, the House Appropriations Committee passed its spending bill to fund the U.S. Department of Interior and the U.S. Environmental Protection Agency. While the bill provides an increase to the Water Infrastructure Finance and Innovation Act (WIFIA) — providing $75 million, compared to $63 million in FY18 — it funds the Clean Water and Drinking Water State Revolving Fund programs at FY17 levels, $1.393 billion and $863 million respectively. The bill includes several policy riders, including one to repeal the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers Clean Water Rule. 

Meanwhile, the Senate Appropriations Committee passed its spending bill on June 14. The Senate bill provides mostly level funding at FY18 levels for the Clean Water State Revolving Fund ($1.694 billion), Drinking Water State Revolving Fund ($1.164 billion), WIFIA ($63 million) and Brownfields ($80 million). It does not include the Clean Water Rule policy rider.

Housing and Urban Development

The House and Senate Appropriations Committees have both passed good Transportation-HUD bills, albeit with a few differences between them. Both bills reject White House budget proposals to eliminate programs like CDBG and HOME, and to increase rent and work requirements on tenants of HUD-assisted housing. Instead, both bills would keep funding mostly level for grants, including $3.3 billion for CDBG. The Senate bill is slightly more generous in other areas, such as federal rental assistance programs, which would be funded at a level to provide up to 7,600 new rental vouchers to veterans and youth aging out of the foster care system. The House bill would not provide for any additional rental vouchers.

Labor-HHS-Education

Finally, on June 15, the House Appropriations Committee marked up the Labor-HHS-Education bill, which largely rejects the President’s proposed cuts and holds funding flat for many programs of importance to cities, including after school programming and workforce development.


Highlights include:

  • A $1 billion increase to the budget for the Department of Health and Human Services, which is largely directed towards the National Institutes of Health. The Substance Abuse and Mental Health Administration would receive an increase of $448 million, largely directed towards the heroin and opioid epidemic. The bill also continues to contain language that would prevent the Centers for Disease Control and Prevention from advocating or promoting gun control, a measure that NLC’s National Municipal Policy does not support.
  • A $43 million increase to the Department of Education, which largely preserves the programs that city leaders utilize, including 21st Century Community Learning Centers, the GEAR UP Program and the Individuals with Disabilities Act. The bill also contains an increase in funding directed towards charter schools.
  • A $89 million cut to the Department of Labor from FY18 levels, though the bill does keep level funding for Workforce Innovation and Opportunity Act-funded programs.
  • Funding in the bill also preserves the Corporation for National and Community Service.

The Senate is expected to mark up the Labor-HHS-Education bill the week of June 25.


Senate Committee Passes Farm Bill

Carolyn Berndt, 202.626.3101

On June 13, the Senate Committee on Agriculture, Nutrition and Forestry passed bipartisan legislation commonly referred to as the Farm Bill (S. 3042) by a vote of 20-1. The Senate is scheduled to bring the bill up to the floor before the July 4 recess. 

The Farm Bill is wide-ranging legislation that establishes federal farm, food and rural policy. Important to cities and towns are the portions of the bill pertaining to rural development, water infrastructure and conservation, and food and nutrition.

Rural Development Title

The Rural Development Title provides an opportunity to advance rural development programs such as housing, business development, and water, energy and broadband infrastructure. The Senate bill maintains the funding level for water infrastructure grants, while increasing the maximum grant amount from $100,000 to $200,000. The bill also increases opportunities for broadband grants and loans to improve access in rural areas, reauthorizing the program at $150 million annually for five years. 
Finally, the Senate bill would overturn a USDA decision last year to eliminate the Under Secretary for Rural Development. 

Conservation Title

The Senate bill makes minor changes to conservation programs such as the Regional Conservation Partnership Program (RCPP), under which state agencies work with farmers to voluntarily reduce nutrient pollution and runoff, as well as spares conservation programs from major cuts. Specifically, changes to the RCPP program include: allowing organizations to receive funding for outreach and technical assistance, increasing emphasis on conservation outcomes, and increasing the funding allocation of projects selected at the state level to ensure local concerns are addressed.

Nutrition Title

Within this title, NLC supports programs that promote local and regional food systems, which fare well in the Senate bill. Specifically, the bill increases funding for the Food Insecurity Nutrition Incentives program, a competitive grant program that provides low-income consumers with cash incentives that increase their purchasing power at farmers markets; creates the Local Agriculture Market Program that includes streamlining the Farmers Market and Local Food Promotion Program, a competitive grant program aimed at increasing and strengthening direct producer-to-consumer marketing channels; reauthorizes the Healthy Food Financing Initiative, which helps eliminate food deserts; reauthorizes the Senior Farmers Market Nutrition program, which incentivizes seniors to buy fresh produce from farmers markets; and supports urban agriculture sites.

Additionally, the Senate bill steers clear of controversial changes to the Supplemental Nutrition Assistance Program (SNAP), formerly called the Food Stamp program, which provides greater access to nutrition for low-income households. Senate changes focus on improving the income verification process for SNAP through pilot projects to develop more accurate ways of confirming the work income of an applicant or beneficiary.

Last month, the House failed to pass its version of the bill, the Agriculture and Nutrition Act (H.R. 2), after a group of Republican lawmakers joined all Democrats in opposing the legislation. Conservative Republicans rejected the bill over a fight within the party over immigration, while Democrats opposed the bill over changes to work requirements for SNAP recipients.

In a deal with conservative Republicans, the House is scheduled to vote this week on two immigration bills, but it’s unclear when the House will vote again on the Farm Bill and whether conservative Republicans will support the bill. 

With the House and Senate bills far apart on policy issues, including a provision in the House bill that would preempt state and local control to set regulations on agricultural products shipped to their state, which NLC opposed, it is uncertain whether the two chambers could reconcile their bills before the Farm Bill authorization expires on September 30.


Are You Ready for August Recess?

Ashley Smith, 202.626.3094

Meeting with Members of Congress while they’re home is one of the best ways to help them understand how cities are leading the way in rebuilding our nation’s infrastructure and why we cannot address the infrastructure gap alone. 

Unfortunately, progress on a comprehensive federal infrastructure plan continues to stall. And with less than 50 days until the House returns home for the full August recess, we need city leaders to continue urge Congress to step up to the plate and invest in rebuilding and reimagining America’s infrastructure with us. That’s why we’ve launched a new action guide to help you meet with your Members of Congress during August recess: 

Yellow Banner Reading: "In-District Congressional Meeting Action Guide"

Our roadways, our transit and water systems, our broadband networks, and our workforce can’t wait another year for Congress to find the funds to invest in infrastructure. By standing together during August recess, we can continue to make progress in moving a federal infrastructure plan forward.

 

House Passes Water Resources Bill

Carolyn Berndt, 202.626.3101

On June 6, the House passed the bipartisan Water Resources Development Act (H.R. 8, WRDA) by an overwhelming vote of 408-2. The Water Resources Development Act, which NLC supported, authorizes $3.5 billion of U.S. Army Corps of Engineers (Army Corps) projects and programs related to flood control, navigation and ecosystem restoration. The bill includes $2.5 billion of federal spending on seven new Army Corps projects, plus additional money on modifications to other projects and programs like those targeted at levee and dam safety. 

Of the 52 amendments that were considered, 50 of them passed by voice vote, including ones related to disaster mitigation in Puerto Rico, Texas, Florida and other areas; meaningful consultation between the Army Corps and communities; and alternative agreements and use of dredge material. 

The Senate is scheduled to bring its version of the bill, America’s Water Infrastructure Act (S 2800), up to the floor by the end of the month. Beyond the traditional Army Corps projects, the Senate bill includes additional water infrastructure provisions like supporting the State Revolving Funds, WIFIA, integrated planning, and workforce development within the water sector, which are not included in the House bill.

Congress typically passes water resources development bills every two years, with the last WRDA bill signed into law in December 2016. Congress is expected to pass a WRDA bill before the end of the year.


House to Debate Immigration Bills

Stephanie Martinez-Ruckman, 202.626.3098

Last week, House Speaker Paul Ryan announced that the House of Representatives would bring two immigration bills to the floor this week for consideration.  The first bill, H.R. 4760, Securing America’s Future Act of 2018, as proposed by Representative Bob Goodlatte (R-VA), includes language that would end chain migration, the visa lottery system and authorize funding for a southern border wall in addition to language regarding withholding funding from sanctuary cities. 

The second bill, the Border Security and Immigration Reform Act of 2018, proposed as a compromise bill by Speaker Paul Ryan, includes clarifications of standards for family detention, however the language included in the bill does not specifically call for parents to be kept with children nor does it speak to the conditions on how children are to be detained.  The bill provides a pathway to citizenship for DREAMers, toughens rules for asylum seekers, places reductions on chain migration and contains $25 billion to build a southern border wall with Mexico.

These bills are universally rejected by House Democrats and the Republicans could lose no more than 22 votes to ensure their passage. Even if either bill were to pass the House, it is unlikely that it will receive the 60 votes needed to get through the Senate’s cloture rule.  

This movement comes after a challenge from centrist Republicans and Democrats who were very close to accumulating the necessary votes for a discharge petition procedure, which would have forced House votes on bipartisan immigration language.  Supporters of the discharge petition were only two votes shy of the needed 218 signatures.

After a failed attempt in February to find a legislative solution for the Deferred Action for Childhood Arrivals program, as well as satisfy the president’s four pillars for immigration reform, this week’s votes will represent another shot at finding compromise between border security and protections for Dreamers.


Opioid Week in the House 

Yucel Ors, 202.626.3124

In an unprecedented effort, the House is proceeding to consider nearly 70 opioid related bills by the end of the month. Normally, these bills would be combined through the committee hearing process into a single comprehensive bill, but during this tough election year, every Member of Congress wants their name on a bill addressing the opioid crisis. 

The package of bills includes legislation that will establish Comprehensive Opioid Recovery Centers (CORCs); improve federal support for Prescription Drug Monitoring Programs (PDMP); expand medication-assisted treatment (MAT); improve the ability of the federal government to prevent the illegal distribution of fentanyl and other synthetic opioids; and increase the funding for the Comprehensive Addiction and Recovery Act’s (CARA) Building Communities of Recovery Program.

While the House considers additional opioid bills, NLC is concerned that states have been slow to use the $1 billion of the Fiscal Year (FY) 2017 and FY 2018 funding authorized by the Comprehensive Addiction and Recovery Act (CARA) of 2016 (Public Law No: 114-198) and the 21st Century Cures Act (Public Law 114–255). Lack of clarity from Congress and the Administration on how states should use the money has left millions of dollars in federal funding unspent. NLC believes that local governments are best positioned to quickly put the unspent funding, and any additional funding that Congress provides for opioid abuse prevention and treatment programs, to immediate use. 

 

Senate HELP Committee to Vote on Perkins Act 

Stephanie Martinez-Ruckman, 202.626.3098

After successful negotiations between Senators Enzi (R-WY) and Casey (D-PA), the Senate Health, Education, Labor and Pensions Committee will mark-up legislation during the week of June 25 to reauthorize the Carl D. Perkins Career and Technical Education Act. The House passed their version of the bill, H.R. 2353, in June of last year. Perkins was last reauthorized in 2006 and was originally due for reauthorization in 2012.

The Carl D. Perkins Career and Technical Education Act (Perkins Act) directs investment by the federal government to vocational and technical education across the country, with an increased focus on academic achievement and strengthening the connections between secondary and postsecondary education. NLC has long advocated for federal support of this bill through our National Municipal Policy and strengthening connections to career and technical education through the Perkins Act is one of the key recommendations of our workforce provisions for infrastructure investment. Investments in Perkins are also a pillar of the White House’s increased focus on apprenticeships and workforce development.


Tax Reform 2.0?

Brian Egan, 202.623.3107

When tax reform (H.R. 1) passed in 2017, it included a host of provisions slated to sunset in 2026. Fast forward six months, and now there is talk about a possible tax reform 2.0 package. While a second go at tax reform would mostly center around making these newly enacted tax cuts permanent beyond 2026, any attempt at changing the tax code lends itself to other provisions trying to hitch a ride and conversations about how to pay for them. In addition, lawmakers have a wish list of items that didn’t make the cut last December, as well as technical corrections that may be needed to fill in where guidance alone cannot.

NLC and our partners have been on Capitol Hill keeping a steady drumbeat of support for the tax exemption on municipal bonds, qualified private activity bonds (PABs), and key tax credits that spur economic growth and help families in cities. Cities are also pushing for the reinstallation of the advance refunding bond — a tool that has helped cities achieve lower interest rates on bonds, but was axed in last year’s tax bill.

Here’s where we stand today – discussions are happening but have yet to lead anywhere substantive. While we could see more concrete details and plans as early as this summer, it would require a tremendous amount of political capital to move anything substantial through both chambers before the midterm elections. Treasury will continue to release guidance and clarifications surrounding new changes made last year, including those pertaining to alternatives to the state and local tax (SALT) deduction and further guidance around opportunity zone funds. Additionally, thanks to the tireless advocacy of thousands of local leaders, legislators seem to understand the importance of critical tools like the tax exemption for bonds used to finance infrastructure. The conversation, however, never fully ends.


Local INFRA Projects are on the FASTLANE to Completion

Nathan Levi, 202.626.3169

On June 8, the United States Department of Transportation (USDOT) released the winners of the Infrastructure for Rebuilding America (INFRA) grants. The winners included 26 projects, half of which are in rural areas. All in all, roughly $1.5 billion will be given to localities in order to complete their dream infrastructure projects. INFRA grants were created under the wing of the Fixing America’s Surface Transportation (FAST) Act of 2015 and are a revised version of the FASTLANE grants program for freight projects, which had previously existed under the FAST Act. INFRA is mostly focused on highways, but also includes projects that are aimed at rail and port infrastructure. Secretary of Transportation Elaine Chao said that “when you build better infrastructure, you build a better life,” and that is exactly what these grants aim to help do. These projects also have the staying power to make a difference in the long term. “These INFRA grants will empower states and communities to make significant long-term infrastructure improvements that will shape transportation and mobility for decades to come,” said Secretary Chao.

The other major announcement on June 8 was the first allotment of $677 million out of the planned $3.2 billion in the Airport Improvement Program (AIP). Through 241 grants, 346 projects will see the light of day. The different projects focus on many aspects of airport upkeep, though the main goals of the AIP grants are to maintain and improve the safety and efficiency of the nation’s system of airports. Of the AIP grants, Secretary Chao said that they “will enhance airport safety, modernize our aviation infrastructure and strengthen the economic vitality of communities throughout the country.” Congress has come through on part of the down payment promised for infrastructure spending, but it is still important to keep advocating for investment in America’s cities and their infrastructure. 


NLC Asks the AG to Release FY17 Law Enforcement Grant Awards 

Yucel Ors, 202.626.3124

On July 11, NLC sent a letter to the U.S. Attorney General asking for the immediate release of the FY 2017 Edward Byrne Justice Assistance Grants (Byrne JAG) awards. The Department of Justice (DOJ) delayed the release of the FY17 funding awards because of current litigation that questions the legality of the new “access” and “notification” requirements the DOJ placed on the Byrne JAG award recipients. When the Seventh Circuit Court of Appeals issued an opinion affirming the nationwide preliminary injunction on the imposition of new conditions on the Byrne JAG grant program, NLC had hoped the DOJ would release the FY17 Byrne JAG awards immediately. While there is nothing in the ruling that would prevent the DOJ from releasing the funds, we are concerned that the DOJ’s refusal to release the grants puts the safety of local law enforcement officers at risk.

In addition, on June 6, a federal district court delivered another victory to states and local governments who sued the Attorney General over his effort to include additional conditions to receive Byrne JAG funding. In City of Philadelphia v. Sessions, the federal district court became the first to rule that 8 U.S.C. 1373 is unconstitutional. The statute prohibits states and local governments from restricting employees from sharing immigration status information with federal immigration officials. NLC had joined amicus in support of Philadelphia. 


Senate Hearing Examines How AVs Will Impact Transportation Infrastructure

Nathan Levi, 202.626.3169

On June 13, the Environment and Public Works Senate Committee held a hearing on what the effects of Autonomous Vehicles (AVs) will be on the nation’s roads and bridges. An expert panel of state and local government officials - as well as interested third party organizations - presented their ideas about the future of autonomous transportation of people and freight to the committee. The hearing unearthed many uncertainties about the coming AV technology: How will these vehicles respond to unmarked or damaged roads? Will AVs be prepared to move between different types of terrains, from urban streets, to rural roads, to mountain passes? How will automation affect freight and the movement of goods? How will roads and bridges be improved upon with technological advances? What needs to be done to prepare for this wave of innovation? 

Not all these questions have answers. As Chairman John Barrasso (R-WY) stated, what became clear was that there “doesn’t seem to be … a uniform agreement as to where the future may be taking us.” Several panelists raised their concerns with the current American Vision for Safer Transportation through Advancement of Revolutionary Technologies (AV START) Act. New York City Department of Transportation Commissioner Polly Trottenberg questioned the lack of data access provisions, claiming that “data will be crucial to [cities] in making … infrastructure decisions and seeing where there are safety challenges.” Trottenberg also bemoaned the fact that even though “cities are where the bulk of Americans live… the federal government has not meaningfully involved” them in the “development of [Highly Automated Vehicle] policy.” Cities provide a crucial proving ground for AV testing, and Commissioner Trottenberg argued the federal government should “engage with cities more directly.” 

Ultimately, the hearing provided a split view of the path ahead, with some panelists offering the vision of a connected transportation system to improve the flow of people and goods, while others saw the dangers of transitioning to a new technology too quickly without demonstrated effectiveness and safety. However, everyone agreed that we must proactively prepare for this coming technology, for it stands to revolutionize transportation and infrastructure as we know it. 


Ensure Your City is Eligible for Mobile Broadband Infrastructure Funding

Angelina Panettieri, 202.626.3196

The Federal Communications Commission (FCC) is launching a new program to bring advanced wireless services primarily to rural areas, and local government officials have the opportunity to challenge an initial determination that their community is ineligible for support. To learn how you can ensure your city’s designation for federal mobile broadband infrastructure spending eligibility is accurate, click here to register for a webinar on June 21 at 3:00PM EDT. 

This challenge process is critical to ensuring the success of the Mobility Fund Phase II (MF-II), a new FCC program that will invest $4.53 billion over 10 years to bring 4G LTE wireless services to unserved areas, primarily in rural America. MF-II will use a reverse auction to target funding at areas that lack unsubsidized service and with minimum download speeds of at least 5 megabits per second. 

The challenge process will also give communities an opportunity to submit speed test data through a new USAC portal to show that an area lacks adequate coverage to qualify as already served and should therefore be eligible for support. The MF-II Challenge Process portal is open through August 27, 2018. To learn more about the MF-II process and view a map of initial determinations for eligible and ineligible areas, click here

South Dakota V. Wayfair: What's Next for Internet Sales Tax?

Ashley Smith, 202.626.3094

States and local governments hold their breath waiting for the Supreme Court to rule that they may require out-of-state vendors to collect sales tax. Join Tillman Breckenridge, Bailey Glasser, who wrote the State and Local Legal Center amicus brief in this case, in a discussion about what the Court's opinion says. Craig Johnson, Streamlined Sales Tax Governing Board, will discuss what states and local governments may do to implement the Court's decision. Emily Swenson Brock, Government Finance Officers Association, will discuss how Congress and state and local government Chief Financial Officers are reacting to the decision and lobbying strategy for states and local governments.  

Date: July 12, 2018
Time: 1 PM EDT
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