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June 23, 2014

UPDATE ON FEDERAL POLICy initiatives:

i.   Local Leaders Urge Congress to Preserve Transportation Alternatives Program
ii.  EPA Extends Waters of the U.S. Comment Period
iii.  House Judiciary Committee Passes Permanent Internet Tax Ban Bill
iv.  House Committee Passes Terrorism Risk Insurance Extension
v.  Appropriations Negotiation Stalls in Senate; Delays Likely for FY2015 Funding

Dear Mayor:

Our thanks to the Federal Advocacy staff at the National League of Cities (NLC) for their efforts on behalf of our nation’s municipalities. Based on information they have provided, here’s an update on some key policy initiatives.

i. Local Leaders Urge Congress to Preserve Transportation Alternatives Program

Almost 400 local officials joined together to urge Congress to continue funding the Transportation Alternatives Program (TAP), which allocates resources for transportation alternatives that enhance the safety and performance of the nation's highways and street networks. The letter to Senate Environment and Public Works Committee Chairman Barbara Boxer, a joint effort of the National League of Cities and the U.S. Conference of Mayors, calls on Congress to continue this important program and urges congressional leaders to "continue to affirm the role of local elected leaders as [they] advance legislation renewing MAP-21."

The message is particularly timely, as the House and Senate continue to grapple over how to fund federal transportation programs and the renewal of the Moving Ahead for Progress in the 21st Century Act (MAP-21). Key areas of disagreement in the debate include the role of local officials in determining the fate of federal transportation dollars and the process for selecting which projects get funded; both are priorities in a new program for NLC and cities.

A copy of the letter can be found here. To follow the transportation debate and participate in NLC's advocacy efforts, sign up here. If you signed the letter, please forward it to your congressional delegation and reaffirm your support for the program and the role of local leaders in making decisions about which projects are funded in their communities. If you did not get an opportunity to sign this letter, please write your own letter to Congress and let them know how important transportation dollars are to your community.

ii. EPA Extends Waters of the U.S. Comment Period

Last week, in response to advocacy by NLC, the U.S. Environmental Protection Agency announced an extension of the deadline by which comments are due to its proposed "Waters of the U.S." rule. The proposed rule would change the Clean Water Act (CWA) definition of "Waters of the U.S.," which is used to determine whether individual water bodies are jurisdictional under the CWA and thereby subject to permitting and other CWA requirements.

Under the proposed rule, all tributaries and adjacent waters would be considered jurisdictional, as well as "other waters" that would have to meet a "significant nexus" threshold in order to be considered jurisdictional.

EPA also proposed changes to a number of regulatory definitions, which could impact the extent and number of waters covered:

  • First time definition of "tributary," which includes ditches unless otherwise exempt.

  • Change in the term "adjacent wetlands" to "adjacent waters," defined as "bordering, contiguous or neighboring." A first time definition of "neighboring" is included in the proposed rule, as well as first time definitions of "floodplain" and "riparian area" - waters which would be considered jurisdictional

  • First time definitions of "other waters" and "significant nexus."

  • In addition, under the proposed rule, because Municipal Separate Storm Sewer System (MS4) ditches, channels, conveyances etc. are not explicitly exempt under the proposed rule, they could be considered jurisdictional and thereby subject to Section 404 permits, as well as state Water Quality Standards. Moreover, because green infrastructure is not exempt under the proposed rule, Section 404 permits could be required for green infrastructure construction and maintenance.

EPA is now accepting comments on the proposed rule through October 20. NLC will submit comments to address its concerns about the proposed rule, and encourages communities to consider doing the same. Submitting comments on the proposed rule, identified by Docket ID No. EPA-HQ-OW-2011-0880, can be done online by web submission or email. For web submissions, visit the Federal e-Rulemaking Portal and follow the instructions for submitting comments. For email submissions, email ow-docket@epa.gov and include EPA-HQ-OW-2011-0880 in the subject line of the message.

If your municipality decides to submit comments, please contact NLC’s Carolyn Berndt at berndt@nlc.org and copy Jon Moran at jmoran@njslom.com.

iii. House Judiciary Committee Passes Permanent Internet Tax Ban Bill

Earlier this week and over NLC's objections, the House Judiciary Committee passed a bill to that preempts local government authority over internet access taxation. The bill, H.R. 3086, the Permanent Internet Tax Freedom Act (ITFA) makes permanent that moratorium on taxing Internet access that has been in place since ITFA was first passed in 1998. The moratorium, which Congress has extended several times, expires on November 1, 2014. In addition to making the ban permanent, the bill repeals the grandfather clause that preserved the taxing authority of the ten states that implemented an Internet access tax prior to 1998: Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas, Washington, and Wisconsin.

As part of its advocacy efforts opposing the legislation, NLC joined with national state and local government associations, as well as state municipal leagues, to lobby support for a temporary ban rather than the permanent measure that passed. Although it failed, NLC welcomed the support of Representatives John Conyers (MI) and Sheila Jackson Lee (TX), who introduced an amendment at this week's hearing that called for a four year extension and preserved the status of the grandfathered states.

As a next step in the legislative process, the Congressional Budget Office will score the bill to assess its fiscal impact on federal, state, and local governments. Because the bill eliminates the grandfather clause (and the tax revenues that some states are receiving), the CBO score will presumably show that the bill will costs state and local governments, which could bolster NLC's opposition to the measure.

There were a few positive moments worth noting in Wednesday's hearing. Several Committee members, including Representatives Suzan DelBene (WA) and Jason Chaffetz (UT) spoke out in support of the Marketplace Fairness Act, a top legislative priority for NLC. As the internet tax moratorium date nears, a version of ITFA could possibly be a vehicle for a Marketplace Fairness amendment later this year.
As ITFA awaits a vote on the House floor, NLC will continue to oppose it and to mobilize Senate support in opposition to a permanent ban.

iv. House Committee Passes Terrorism Risk Insurance Extension

On Friday, June 20, the House Financial Services Committee approved H.R. 4871, TRIA Reform Act of 2014, which would extend the Terrorism Risk Insurance Act for another five years. TRIA provides a federal backstop for losses as a result of terrorist attacks. In addition to extending TRIA, the bill also includes significant changes that will scale back the program. The bill bifurcates the definition of acts of terrorism into nuclear, biological, chemical or radiological (NBCR) attacks and non-NBCR attacks. The bill raises the trigger for the federal government guarantee from $100 to $500 million in damages for non-NBCR attacks and decreases the federal share of insurers' losses to 80 percent from 85 percent. For NBCR attacks, the current $100 million trigger and 85 percent federal share remain the same. Also, the bill provides small insurers the ability to opt-out of providing terrorism risk insurance, if their state regulator determines continued participation by such insurer would create a financial hardship or that it would be financially infeasible for the insurer to provide coverage for insured losses

The Senate Banking Committee approved S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014, on June 3. The Senate bill leaves the current program substantially intact and extends it for seven years.

TRIA is a vital public-private risk sharing mechanism that helps protect municipalities against losses, while keeping terrorism risk insurance affordable. NLC will continue to monitor the progress of the TRIA legislation and work with sponsors to ensure it is extended.

v. Appropriations Negotiation Stalls in Senate; Delays Likely for FY2015 Funding

The Senate has cancelled anticipated votes this month on a package of three appropriations bills to fund agriculture, transportation, housing, and other federal programs in FY 2015 because of a partisan disagreement over how to proceed on amendments to those bills. The impasse in the Senate fuels speculation that Congress will not be able to complete work on a majority of the spending bills by the fiscal year deadline of September 30. The consequences of this are two-fold. One, local governments could experience delays in receiving federal funding. Two, the House could end up with the upper hand in any House-Senate negotiations on the Transportation and Housing and Urban Development Appropriations bill (T-HUD), which has already passed the House with several amendments that may impact local governments.

They include:

  • An amendment that would prohibit the Department of Housing and Urban Development (HUD) from approving grant funds to pay down loans made or backed by HUD itself would affect many community development programs and would effectively eliminate the Section 108 loan program that helps municipalities leverage CDBG grants into loans that are used to finance CDBG eligible activities in economically distressed neighborhoods. NLC opposes the amendment because it would reduce the financing options available to local governments for improvements in hardest hit neighborhoods. Similar provisions have been blocked from spending bills in previous years.

  • An amendment that would prohibit HUD from enacting its proposed Affirmatively Furthering Fair Housing Rule. In the rulemaking process, NLC has raised concerns with the proposed rule that overhaul the process of how HUD determines if local and state governments are in compliance with the Fair Housing Act.

In addition to funding delays, the impasse in the Senate means local officials and other stakeholders may have a very small window to weigh-in on FY 2015 appropriations if decisions are postponed until after the November elections.

If you have any questions on any of these items, 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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