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November 12, 2013

  

Re: Federal Action Update
 

I. House-Senate Budget Conference
II. Flood Insurance Reforms Advanced
III. Former Mayor Joins White House Intergovernmental Affairs
IV. Clean Water Act Rule Changes To Be Considered

Dear Mayor:

Here is an update on federal developments on some issues important to New Jersey municipalities.

I. House-Senate Budget Conference Continues

On Wednesday, November 13, House and Senate budget conferees hold their second public hearing in an effort to negotiate a budget agreement for FY 2014. During its first public meeting, the committee expressed interest in reaching a small-scale agreement that would provide some relief from sequestration-driven budget cuts currently scheduled to take effect mid- January 2014.

The budget conference committee includes 22 senators (the entire Senate Budget Committee) and seven House members – four Republicans and three Democrats. Any deal must win a majority of each chamber’s members.

Under the law that ended last month's 16 day federal government shutdown and averted a default on the nation's debts, Congress has until December 13 to reach an agreement. However, wide philosophical differences remain between the members of the committee, including its leaders, House Budget Chairman Paul D. Ryan, and Senate Budget Chairwoman Patty Murray.

NLC continues to monitor the work of the committee and has urged that any budget agreement preserve tax exemption for municipal bonds, which greatly impacts borrowing costs for cities.

II. Flood Insurance Reforms Advanced

On October 29, 2013, a bipartisan coalition of lawmakers introduced the Homeowner Flood Insurance Affordability Act of 2013 (S.1610/H.R. 3370). If enacted into law, the bill would delay the implementation of rate increases mandated by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12) until after FEMA completes an affordability study, proposes solutions to address affordability issues, and certifies that its mapping process is accurate.

The lawmakers introduced the bill in response to rate increases mandated by BW-12, which has resulted in 20 – 25 percent annual insurance premium increases for some property owners over the next four – five years. Enacted to address a $24 billion deficit in the National Flood Insurance Program (NFIP) and ensure millions of American homeowners could continue to purchase flood insurance, BW-12 requires FEMA to adjust flood insurance premiums to reflect true flood risk and phase out subsidies for properties built before the community adopted its first Flood Insurance Rate Map. These rate increases are having substantial effect on municipalities nationwide in multiple areas such as real estate markets, banks and mortgage companies, elderly citizens living on fixed income, and policyholders, who built their communities with the best available information.

During a U.S. Senate Banking Committee hearing on Sept. 18, FEMA Director Craig Fugate said that the Act unfairly hit middle-class homeowners who had not been flooded repeatedly, but he added that only Congress can fix the law. Fugate also acknowledged that the affordability study, which is required by BW-12, may take about two years to complete.

Senator Menendez is prime sponsor of S.1610 and Congressmen Andrews, Holt, Lance, LoBiondo, Pallone, Pascrell, Runyan, Sires and Smith are all co-sponsors of H.R. 3370.

III. Former Mayor Joins White House Intergovernmental Affairs Team

Last month, former Hampton, Virginia mayor Molly Ward joined the White House staff as Special Assistant to the President and Deputy Director of Intergovernmental Affairs. Prior to her service as Mayor, Ward also served as Hampton's elected Treasurer and was a practicing attorney. In her role at the White House, Ward will work closely with NLC and other organizations representing state and local governments.

IV. Clean Water Act Rule Changes To Be Considered

The National League of Cities (NLC) and other groups representing local government officials in Washington have filed comments with the U.S. Environmental Protection Agency (EPA) and the Office of Management and Budget (OMB) regarding EPA and the U.S. Army Corps of Engineers' (Corps) proposed rule (which you can access online at: (http://water.epa.gov/lawsregs/guidance/wetlands/CWAwaters.cfm) to change the Clean Water Act definition of "Waters of the U.S." and a draft science report, Connectivity of Streams and Wetlands to Downstream Waters: A Review and Synthesis of the Scientific evidence (http://yosemite.epa.gov/sab/sabproduct.nsf/46963ceebabd621905256cae0053d5c6/7724357376745f48852579e60043e88c!OpenDocument). EPA has indicated that the draft science report will serve as the basis for the rulemaking. The proposed rule is a replacement of a 2011 “Draft Guidance on Identifying Waters Protected by the Clean Water Act.”

In the comment letter, NLC urged the EPA and the Corps to hold a briefing for state and local governments groups on the differences between the 2011 Draft Guidance and the proposed rule. Additionally, NLC raised concerns with the sequence and timing of the draft science report and how it fits into the proposed "Waters of the U.S." rulemaking process, especially since the document will be used as a basis to claim federal jurisdiction over certain water bodies. NLC's position is that by releasing the draft report for public comment at the same time as the proposed rule was sent to OMB for review, EPA and the Corps have taken away an opportunity for cities, NLC, and others to provide useful feedback on the draft science report that could inform the development of the proposed rule.

If you have any questions, contact Jon Moran at 609-695-3481, ext. 121 or jmoran@njslom.com

Very truly yours,

William G. Dressel, Jr.
Executive Director

 

 

 

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