Federal Advocacy Update: Week of May 7, 2019

The U.S. Capitol Building.
The U.S. Capitol Building.

In this issue:

NLC Supports Commitment to Paris Agreement

Carolyn Berndt, 202.626.3101

On May 2, the House voted 231-190 to prohibit the United States withdrawal from the Paris Climate Agreement. The Climate Action Now Act (H.R. 9), sponsored by Representative Kathy Castor (D-FL-14), the Select Committee on the Climate Crisis Chair, directs the president to develop a plan for the United States to meet its nationally determined contribution under the Paris Climate Agreement. 

In a statement, NLC President Karen Freeman-Wilson, Mayor of Gary, Indiana, said, “America’s cities, towns and villages commend the House for reinforcing our nation’s commitment to addressing one of the greatest challenges of our time—the changing climate and its impact on the health and resilience of our communities.”

In June 2017, President Trump announced that the United States would withdraw from the Paris Climate Change Agreement. The agreement, which was supported by NLC and is signed by nearly 200 nations, was created to limit greenhouse gas emissions and combat rising global temperatures. NLC led the largest delegation of city leaders at the 2015 United Nations Climate Change Conference in Paris, where the climate agreement was adopted.

To date, 250 cities have signed the We Are Still In declaration “demonstrating an enduring commitment to delivering on the promise of the Paris Agreement and America’s contribution to it.”

The House vote comes as climate change has emerged as a key congressional priority and represents the first climate-related legislation Speaker Nancy Pelosi (D-CA-12) has brought to the House floor this Congress. 

The bill, however, is unlikely to come up for a vote in the Senate, and President Trump has issued a veto threat. 

NLC Supports Bipartisan Transportation Alternatives Bill

Brittney Kohler, 202.626.3164

NLC supports the Transportation Alternatives Enhancements Act (S. 1098) introduced by Senators Ben Cardin (D-MD) and Roger Wicker (R-MS). This bipartisan bill improves on the highly successful Transportation Alternatives Program (TAP),  the primary federal funding program for bikeways and sidewalks to reduce traffic congestion, provide children with safe routes to school, and give communities more affordable transportation options. S.1098 also energizes the TAP program with common sense reforms: TAP will be able to grow if transportation investment grows, it improves local control to complete projects, and it provides communities with access to project support by both their state and non-profits. 

As Congress moves to reauthorize the FAST Act transportation bill this year, NLC supports strong increases to multimodal and collaborative programs like TAP, which provided $850 million to recipients in 2019. To keep reading and find out more about what this bill means for your community, click here to view the blog on CitiesSpeak.

Ruppersberger Announces Violence Prevention Bill

Yucel Ors, 202.626.3124

On May 6, Congressman Dutch Ruppersberger (D-MD-02) unveiled new legislation to expand hospital-based violence prevention programs across the country. The End the Cycle of Violence Act provides federal grants to hospitals that offer services to violent crime victims while they recover from their injuries. It is modeled on the Violence Intervention Program at the University of Maryland Medical Center’s R Adams Cowley Shock Trauma Center, where a staggering 20 percent of patients are victims of violence, usually stabbings and shootings.

The bill, H.R. 2464, requires the Secretary of Health and Human Services to select ten existing violence prevention programs to receive a $750,000 federal grant for expanding services or studying effectiveness. At the end of a 3-year pilot, each hospital will report its findings back to the federal government. The bill is cosponsored by Congresswoman Ann Kuster (D-NH-02).

NLC believes that a comprehensive violence prevention strategy that pursues preventive efforts to minimize future violence is essential to help break the cycle of violence plaguing so many communities. NLC supports the End the Cycle of Violence Act to help health providers develop new and evidence-based programs to reduce the potential for cyclical violence that often results from the trauma victims face in violent confrontations. NLC applauds Congressman Ruppersberger and Congresswoman Kuster for introducing legislation that provides additional resources to public health institutions to expand important violence intervention programs.

First Infrastructure Negotiation Set $2 Trillion Federal Spending Goal Line 

Brittney Kohler, 202.626.3164

On April 30, congressional Democratic leaders went to the White House to meet with the president and his advisors to talk about the National League of Cities’ top legislative ask—an infrastructure bill that rebuilds America in partnership with local communities. Emerging from the meeting, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer reported that it was “very constructive,” with Senator Schumer saying, “It's clear that both the White House and all of us want to get something done on infrastructure in a big and bold way.” White House press secretary Sarah Huckabee Sanders described the meeting as "excellent and productive" and said the president "looks forward to working together in a bipartisan way."

Three key takeaways from the meeting for cities are: 

  1. a goal line of a $2 trillion dollar package was reached which aligns with the needs outlined by the American Society of Civil Engineers Report Card for America’s Infrastructure
  2. the president indicated that the prior White House proposal asking communities to provide a greater matching share than typical of federal program was not how they would necessarily want to move forward; and 
  3. some portion of broadband will be included in the package in addition to areas like transportation. 

Following the meeting, NLC President Karen Freeman-Wilson, Mayor of Gary, Indiana released this statement: “The National League of Cities applauds President Trump and Democratic leaders for focusing on infrastructure. Now is the time to turn today’s infrastructure discussion into action. We urge Congress and the administration to build a bipartisan framework for legislation that funds and fixes our nation’s infrastructure. Our message is clear: Every community deserves safe, reliable infrastructure that will support our country’s economic future. Washington has procrastinated long enough. It’s time to demonstrate leadership and put America’s infrastructure needs first.”

From the Administration, both Secretary of Transportation Elaine Chao and Ivanka Trump attended. Congressional Democratic leaders were joined by Senate Democratic Whip Dick Durbin (IL), Senator Patty Murray (WA), Senator Debbie Stabenow (MI), Senator Ron Wyden (OR), Senator Tom Carper (DE), House Majority Leader Steny Hoyer (MD-05), Representative James Clyburn (SC-06), Representative Ben Ray Luján (NM-03), Representative Richard Neal (MA-01), and Representative Peter DeFazio (OR-04). Senate Majority Leader Mitch McConnell and other Republican congressional leadership did not attend. 

There will be another infrastructure meeting in a few weeks "to discuss specific proposals and financing methods" and to determine the potential funding sources, and communities will be watching closely to see how these negotiations progress.

House Adds NFIP Extension to the Disaster Assistance Bill

Yucel Ors, 202.626.3124

On April 9, the House introduced a new $17.2 billion disaster aid package, H.R. 2157. While the House is set to consider the bill this week, the Senate is still debating how much additional assistance Puerto Rico should receive. The impasse in the Senate is holding up billions of dollars in disaster aid to cities, towns and villages impacted by hurricanes, floods, wildland fires, and other disasters since December. Senate Republicans latest offer includes an additional $300 million in Community Development Block Grant-Disaster Recovery (CDBG-DR) funding for Puerto Rico.

NLC believes that Congress should quickly pass the stalled disaster aid package, which is essential to help the cities, towns and villages that were devastated by natural disaster in 2018 and 2019 recover quickly, mitigate future risks, and improve local infrastructure to better withstand extreme weather in the long-term.

The House bill also includes language that would extend the National Flood Insurance Program (NFIP) through September 30, which is set to expire at the end of May. Once again, a four-month extension is necessary because the House and Senate have been unable to finalize legislation that would provide a long-term (five-years) reauthorization of the program. The previous law that reauthorized the program for five-years expired in September 2017. 

NLC is concerned that there is still considerable uncertainty about the fate of the NFIP and how the proposed reforms will impact flood insurance rates for primary, non-primary, and business properties. As Congress continues to consider these reforms to the NFIP, NLC is working to ensure the legislation protects the grandfathering of flood insurance rates, keeps flood insurance rates affordable, provides incentives to retrofit existing structures, and requires FEMA to utilize the best technology and methods available to improve the mapping process.

To see what the House supplement disaster aid package provides, click here.

NLC Submits Comments Supporting PACE Programs

Carolyn Berndt, 202.626.3101

On May 7, NLC submitted comments on the Consumer Financial Protection Bureau’s (CFPB) Advance Notice of Proposed Rulemaking on Property Assessed Clean Energy (PACE) Financing. CFPB was soliciting information to help it better understand the unique nature of PACE financing. The Economic Growth, Regulatory Relief and Consumer Protection Act, signed into law in May 2018, requires CFPB to develop rules in consultation with state and local governments that ensure consumers can pay their residential PACE financing obligations.

NLC’s comments focus on the importance of PACE programs to local governments by serving a public purpose and the unique nature of PACE as a tax assessment and local government authority.  

PACE financing programs are an innovative local government solution to help property owners finance energy efficiency and renewable energy improvements—such as energy efficient HVAC systems, upgraded insulation, new windows, solar installations, etc.—to their homes and businesses. The PACE program removes many of the energy efficiency and renewable energy retrofit barriers that otherwise exist for residential homeowners and businesses, particularly the high upfront cost of making such an investment and the long-term ability to reap the benefits of cost savings. 

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. 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.

As CFPB moves forward, NLC encourages CFPB to continue to engage in significant and meaningful consultation with local governments throughout the various stages of the rulemaking process to ensure PACE continues to benefit American homeowners and remains a viable financing tool for local governments.

FDA Opens Comment Window on Cannabis Safety Standards

Brian Egan, 202.626.3107 and Yucel Ors, 202.626.3124

On December 20, 2018, the president signed the Farm Bill with a provision that legalized hemp—products derived from the cannabis plant with an extremely low THC content (less than 0.3% by dry weight). Now, in response to this change, the Food and Drug Administration (FDA) is soliciting comments for “data and information about the safety, manufacturing, product quality, marketing, labeling and sale of products containing cannabis or cannabis-derived compounds.” 

While many of the questions are targeted at the medical and scientific community, the notice poses several questions to which local input may be valuable. The FDA specifically seeks comments on what successful safety measures already exist at the state and local levels, and what additional measures are needed at the federal level to ensure public health and safety. The full request and submission portal can be found here. If you plan on submitting comments, or would like to learn how NLC participates in this comment period, please feel free to reach out to either Brian Egan (egan@nlc.org) or Yucel Ors (ors@nlc.org). 

EPA Seeks Feedback on Revising Clean Water Act Certification Process

Carolyn Berndt, 202.626.3101

In April, President Trump issued Executive Order 13868: Promoting Energy Infrastructure and Economic Growth to “[enhance] our Nation’s energy infrastructure, including facilities for the transmission, distribution, storage, and processing of energy resources.” 

The Executive Order directs the U.S. Environmental Protection Agency (EPA) to review its regulations and guidance under the Clean Water Act Section 401, the Water Quality Certification program, to determine whether provisions should be clarified to “promote efficient permitting processes and reduce regulatory uncertainties that currently make energy infrastructure projects expensive and that discourage new investment.”

Section 401 of the Clean Water Act provides that no federal permit or license can be issued that may result in a discharge to waters of the United States unless the state or authorized tribe certifies that the discharge is consistent with water quality requirements or waives certification. In reviewing a proposed federal permit or licenses, states and authorized tribes have the option to grant the permit, grant the permit with conditions, deny the permit, or to waive their right to act. 

In recent years, two states have used this authority to deny a permit for high-profile projects—a pipeline in New York and a coal terminal in Washington. Additionally, Maryland recently approved the relicensing of a hydropower dam with the condition of limiting nutrient pollution into the Chesapeake Bay.

Specifically, under the Executive Order, EPA is charged with issuing new guidance for federal permitting agencies and state and tribal authorities within 60 days (June 10) and to initiate a rulemaking to clarify Section 401 to allow for efficient permitting and increased regulatory certainty within 120 days (August 8). 

Consequently, EPA held a federalism consultation briefing with state and local government associations to gather information on how the agency can improve Section 401 certifications’ substance (proper scope and information needs) and process (timing requests, various stakeholder responsibilities, and information coordination). 

EPA is accepting pre-proposal recommendations through May 24. Comments can be submitted online through Docket No EPA-HQ-OW-2018-0855. NLC plans to submit recommendations in coordination with our state partners. 

NLC Continues Push for BQD Threshold Increase

Brian Egan, 202.626.3107

Federal tax law typically prohibits commercial banks from deducting the interest costs incurred from holding municipal bonds in their portfolios. As a result, commercial banks traditionally do not purchase a large amount of municipal debt. The tax code does provide an exception to the rule. If an issuer (in this case a municipal issuer) reasonably expects to issue less than $10 million of debt in a year, it can elect to issue bank qualified debt (BQD), which banks can hold and still write off most of the carrying costs.  

BQD is a useful tool for small communities who benefit from bypassing the traditional municipal bond underwriting process to sell their bonds directly to local banks. BQD issuers also typically reduce their borrowing costs by an estimated 25-40 basis points. Unfortunately, the $10 million threshold was set in 1986 and has failed to keep pace with inflation. NLC continues to push Congress to introduce and pass legislation that would raise the threshold to $30 million and index it to inflation. House champions are also expected to reintroduce legislation that would reinstate the tax exemption on advance refunding bonds sometime this month.

If your community utilizes BQD, or has lost BQD status, please feel free to reach out to Brian Egan (egan@nlc.org) to learn how you can help advocate for a fix. 

SCOTUS Hears Oral Arguments in the Census Citizenship Case

Brian Egan, 202.626.3107

On April 23, the Supreme Court (SCOTUS) heard oral arguments in the Commerce v. New York case, which will decide the ultimate fate of the citizenship question in the 2020 Census questionnaire. While it is impossible to accurately predict SCOTUS rulings based on oral arguments alone, the sometimes tense debates revealed that the justices were largely falling along ideological lines. Four liberal judges drilled into the federal government on suspected violations to the Administrative Procedure Act (APA), and five conservative judges pushed the defendants on whether the Commerce Secretary truly had no due cause in choosing to add the question. Lisa Soronen of the State and Local Legal Center provides an excellent recap in her blog on CitiesSpeak.

NLC remains committed to keeping local governments up to date on important decennial census information and key dates as we near April 1, 2020. The Local Census Preparedness Network is just shy of 250 municipalities, but we can still grow! Please forward this email to the staff working to prepare your local government for the 2020 Census, so we can ensure your community is in our network. Sign up here.

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