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July 9, 2010

RE: Federal Biweekly Update for the Period Ending July 9, 2010

I. House Passes Mandatory Collective Bargaining Bill
II. U.S. Files Suit Against Arizona Over Immigration Law
III. OTCs Push to Preempt Local Authority Over Hotel Taxes
IV. Introduction of Main Street Fairness Act
V. Work Begins on Fiscal Year 2011 Spending Bills, Major Delays Expected
VI. Bill Would Require Federal Agencies to Pay Local Stormwater Fees
VII. HHS Unveils Website

Dear Mayor:

Here’s the latest bi-weekly update from the Federal Relations Team at the National League of Cities (NLC).

I. House Passes Mandatory Collective Bargaining Bill

Last week, the House passed its version of the supplemental appropriations bill (H.R. 4899) by a vote of 239 to 182.  The bill included $80 billion in funding for the wars in Iraq and Afghanistan and a host of domestic programs.  The legislation also included the mandatory collective bargaining legislation—the Public Safety Employer-Employee Cooperation Act of 2009 (H.R. 413/S. 1611/S. 3194)—which NLC has consistently opposed on the grounds that it interferes with state and local laws, violates principles of federalism, and may be unconstitutional. 

New Jersey law already imposes this requirement, so this provision would not cause any new problems for New Jersey municipalities.

Specifically, the collective bargaining legislation mandates that states and localities collectively bargain with public safety employee labor unions over wages, benefits, and working conditions, under one-size fits all federal rules to be developed later.  Should the mandatory collective bargaining provisions become law, they would interfere with, or in some cases override, longstanding state and local laws governing public sector employment relationships.  The recent House vote occurred without the benefit of public deliberation about the merits of this unfunded mandate, the need for it, or its constitutionality. 

The House-passed bill now moves back to the Senate, which is expected to begin considering it next week.  There is reason to doubt whether the Senate will pass the House version of the bill.  An earlier version of H.R. 4899, which the Senate passed in May after contentious debates, negotiations, and compromises, included only $58.8 billion in funding and did not include additional spending for domestic programs.  In addition, a Senate effort to include the collective bargaining provisions in the legislation failed.  

II. U.S. Files Suit Against Arizona Over Immigration Law

On Tuesday, the U.S. Department of Justice filed a suit against the state of Arizona over the state's controversial immigration law, S.B. 1070.  The law is slated to take effect on July 29. 

In the complaint, filed in the United States District Court of Arizona, the Department of Justice argued that the Arizona law is preempted under federal law and violates the Supremacy Clause of the U.S. Constitution.  According to the Department, "Although states may exercise their police power in a manner that has an incidental or indirect effect on aliens, a state may not establish its own immigration policy or enforce state laws in a manner that interferes with federal immigration law.  The Constitution and the federal immigration laws do not permit the development of a patchwork of state and local immigration policies throughout the country.  

In the suit, the federal government has asked the Court to declare the law invalid and to stop it from taking effect. 

III. OTCs Push to Preempt Local Authority Over Hotel Taxes

As the Senate continues its deliberations on a substitute amendment to the House-passed Small Business Jobs and Credit Act of 2010 (H.R. 5297), online travel companies (OTC) continue to push for language that would preempt local taxing authority of hotel rooms sold over the internet. 

The substitute amendment in question would limit the amount of taxes remitted to state and local governments to the wholesale rate paid by booking agents (e.g., OTCs and travel agencies) rather than the full amount of taxes that are charged to the retail customer. 

NLC is actively opposing introduction of the amendment as part of a broad industry and labor coalition and is arguing that the amount of taxes on a room remitted to cities should be assessed on the amount paid by the customer using the room, not what an OTC may have paid for the room. 

Please urge our Senators to vote AGAINST any amendment offered to preempt state and local taxing authority on hotel rooms

IV. Introduction of Main Street Fairness Act

On July 1, Representative Bill Delahunt (MA) introduced the Main Street Fairness Act (H.R. 5660), which would put internet retailers on par with their brick-and-mortar counterparts regarding the collection of sales taxes.  Internet retailers typically only collect sales taxes in states where they have a physical presence.  The bill, which NLC supports, authorizes states participating in the voluntary Streamlined Sales Tax consortium to collect taxes on their residents' purchases.  Unlike earlier versions of the bill introduced in previous Congresses, which NLC opposed, H.R. 5660 specifically limits its coverage of telecommunications taxes to sales and use taxes.  No hearing has been scheduled on the bill. 

V.  Work Begins on Fiscal Year 2011 Spending Bills, Major Delays Expected

Growing public concern about federal spending and deficits means that Congress will likely delay final consideration on most of the Fiscal Year 2011 domestic spending bills until after the November elections, according to Hill sources and news reports.  However, House and Senate Appropriations Subcommittees are beginning to approve the "first-drafts" of the 12 annual spending bills.  Last week, six spending bills were approved by House Appropriations Subcommittees, including the Transportation-HUD spending bill, the Commerce-Justice-Science spending bill, and the Homeland Security spending bill.   


The Subcommittee draft of the FY 2011 Transportation-HUD spending bill provides $46.6 billion for the Department of Housing and Urban Development, nearly $1 billion more than the President requested.  The subcommittee chose to maintain funding for existing housing programs at the expense of several new initiatives proposed by the President; the bill provides $19.5 billion for the Section 8 Tenant-based rental assistance program, $4.35 billion for the Community Development Block Grant Program, $200 million for HOPE VI program for public housing, $150 million for the Sustainable Communities Initiative, and $2.1 billion for Homeless Assistance Grants.  The bill would not fund the Transforming Rental Assistance program, the Choice Neighborhoods Initiative, or Catalytic Investments Competition Grants; however, the Administration is expected to continue seeking funds for those programs.


As for local transportation programs, the Subcommittee kept airport improvement grants at the FY 2010 level of $3.5 billion, increased funding for federal highway programs from the FY 2010 level of $41.1 billion to $45.2 billion, and increased transit formula grants from $8.3 billion in FY 2010 to $8.96 billion for FY 2011.  In addition, the Committee provided $1.4 billion for high speed rail, $563 million in Amtrak operating grants, and $1.2 billion for Amtrak capital programs.

Funding for the Administration's livable communities initiative would receive $20 million under the Committee recommendation. 

Public Safety

In the Subcommittee draft of the FY 2011 Commerce, Justice, and Science spending bill, state and local law enforcement grant programs would receive nearly $4 billion-an increase of $250 million above the FY 2010 level.  Areas such as the Office of Justice Programs (which implements the Byrne Justice Assistance Grants), domestic violence, as well as sex offender and child exploitation prevention and enforcement programs, would each receive increases under the Subcommittee's recommendation; however, funding for the COPS office would be cut by $60 million. 

The Subcommittee draft of the FY 2011 Homeland Security spending bill adds up to $1.1 billion more than in FY 2010 and $300 million more than the President's request.  In sharp contrast to the President's request, state and local government grants would be level-funded, $1 billion dollars less than President's request.  This includes almost $300 million less for the State Homeland Security Grant Program and Urban Area Security Initiative Grant Program.  Firefighter Assistance Grants, however, would receive a $230 million increase. 

VI. Bill Would Require Federal Agencies to Pay Local Stormwater Fees

Last month, the Senate Environment and Public Works Committee unanimously approved by voice vote legislation that would require federal agencies to pay local pollution fees associated with stormwater that runs off impervious surfaces-such as parking lots-and into local rivers and streams.

The bill (S. 3481), which NLC supports, is sponsored by Sen. Benjamin Cardin (D-MD) and aims to resolve disagreements over whether local governments may collect stormwater fees from the federal government, which is expressly authorized by the Clean Water Act. 

VII. HHS Unveils Website

Earlier this week, the Department of Health and Human Services (HHS) unveiled its newest website,, designed to provide consumers with unprecedented access to the health care marketplace. 

Described by HHS as a "first-of-its-kind" website, empowers consumers to remain informed about available health care options and to retain more control over their personal care.  The site serves as a one-stop shop with access to information on consumer rights and benefits under the Affordable Care Act, a timeline through 2014 of when new programs under the new law will come online, and an insurance finder feature that will allow consumers to easily locate suitable private and public health insurance options. will compile data from more than 1,000 insurance carriers on more than 5,500 available health care products.  In addition to granting access to every public and private coverage option available in the United States, the site will also include information on every Medicaid and Children's Health Insurance Program in the country, along with pre-existing condition plans in every state.  By October 2010, online price estimates for health insurance plans will be included as well.  Improvements to the site are ongoing, and HHS welcomes user feedback. 

For more on any of these, contact Jon Moran at 609-695-3481, ext. 121.

Very truly yours,


William G. Dressel, Jr.
Executive Director




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