October 1, 2007
Federal Update for period ending September 28, 2007
Dear Mayor:
House Approves Stop-gap Funding Measure
On Sep. 26, the House passed a stop-gap funding measure to fund government operations through Nov. 16. The measure, known as a continuing resolution (CR), passed the House 404-14. The CR will keep funds flowing to federal agencies at fiscal 2007 levels and is needed because no fiscal year 2008 appropriations bills have been completed. The new fiscal year began Oct. 1. Besides continuing funding for programs funded through the appropriations process, including the Community Development Block Grant program, HOME, COPS, and transportation, the CR also continues funding for the State Children’s Health Insurance Program (SCHIP) and the Federal Aviation Administration program. The Senate approved the measure on Friday, Sep. 28, and it was signed by the President on Saturday. Earlier this year, the House passed all 12 fiscal 2008 bills. The Senate has passed only four but is expected to pass the fiscal 2008 Defense bill, as well as the bill that funds the Commerce, Science, and Justice agencies next week.
Federal Housing Agency Reform on Fast Track
The House and Senate are moving swiftly in the face of rising home foreclosures to give homeowners options to refinance out of unaffordable mortgages. The House passed H.R. 1852, the Expanding American Homeownership Act, by a vote of 348 to 72. The Senate Committee on Banking, Housing, and Urban Affairs passed companion legislation in the form of a draft bill, the FHA Modernization Act, by a vote of 20 to 1. Both bills would “modernize” FHA rules and policies to reflect changes and innovations in the mortgage finance system. Among the reforms, both the bills would increase FHA loan limits in high cost areas above the current $362,000; lower down-payment requirements on FHA-secured loans; bolster pre-purchase and post-purchase homeowner counseling requirements; and provide FHA greater flexibility to refinance sub-prime, adjustable-rate mortgages into conventional mortgages. The Senate bill still faces a vote by the full Senate before heading to a conference committee to resolve differences with the House bill. NLC endorsed both bills and has urged swift adoption by the Congress and the President’s signature.
House Committees Moving Legislation to Help Homeowners
The House Financial Services Committee passed three NLC-supported bills aimed at improving housing options for families and assisting homeowners. The bills passed are:
H.R. 2930, Supportive Housing for Elderly Act, would expand the Section 202 Affordable housing program, the only HUD program that provides housing exclusively for seniors. The bill provides incentives for developers to preserve and rehabilitate the existing supply of affordable housing for seniors and encourages the development of new homes to meet increasing demand. H.R. 3524, the HOPE VI Reauthorization Act, would reauthorize the HOPE VI program which is due to expire this year. The Hope VI program provides grants to localities for the construction and rehabilitation of public housing units. In addition to reauthorization, the bill would financially reward cities that implement green-building standards in their HOPE VI projects. The bill also requires, for the first time, a one-to-one replacement of any public housing units lost in HOPE VI redevelopment plans. Lastly, the bill has language designed to ensure that communities applying for HOPE VI funds are demolishing public housing units that have no possibility of rehabilitation. H.R. 3355, the Homeowners Defense Act, would assist homeowners living in high weather-risk areas, such as those that are in hurricane paths, with better access to affordable home insurance. Under the bill, states would have the option to participate in an insurance plan that would allow state-sponsored insurance funds to voluntarily bundle their catastrophic risk with one another. Private markets would take on the risk through catastrophe bonds and reinsurance contracts. The bill also provides for federal loans to states impacted by severe natural disasters. The House Ways and Means Committee passed H.R. 3648, the Mortgage Forgiveness Debt Relief Act. Under current law, debt forgiven following mortgage foreclosure or renegotiation is considered taxable-income by the I.R.S. H.R. 3648 would provide relief by permanently excluding debt forgiven under these circumstances from tax liability. The forgiveness would be limited to primary, owner-occupied homes.
House and Senate Pass SCHIP; Presidential Veto Expected
The House and Senate passed a compromise agreement to reauthorize the State Children’s Health Insurance Program (SCHIP). The House vote, 265-159, was 19 votes shy of the number needed to override a threatened presidential veto. The Senate vote was 67 to 29, enough to override a veto. The program expired on Sep. 30, and unless it is reauthorized, several states are expected to run out of funds starting in October. Among other things, the compromise bill would increase funding over the next five years by $35 billion (compared to the $5 billion called for by the President) and allow states to enroll an additional four million low-income children. Currently, approximately 6.5 million children are enrolled in the program. In a joint letter to the Hill, NLC, the National Association of Counties and the United States Conference of Mayors, urged Congress to approve the legislation. The legislation now heads to the President’s desk for signature or a veto.
Senate Approves Water Resources Bill
On Sep. 24, the Senate voted 81-12 in favor of a conference report on H.R. 1495, the Water Resources Development Act. The compromise version of the bill authorizes approximately $23.2 billion for Army Corps of Engineers water projects, several billion dollars more than separately approved by the House and Senate earlier this year. On Aug. 1, the House approved the conference report by a vote of 381-40. The White House has issued a veto threat, but both chambers approved the measure by veto-proof margins. H.R. 1495 would authorize over 900 projects for navigation, environmental restoration, and hurricane, flood or storm damage reduction in 23 states and would increase oversight of the Army Corps of Engineers for projects costing more than $45 million or that were deemed controversial.
Senate Subcommittee Hears Testimony on Water Infrastructure Financing
On Sep. 19, the Senate Committee on Environment and Public Works, Subcommittee on Transportation Safety, Infrastructure Security and Water Quality, heard testimony on the need to invest in clean water infrastructure in our nation’s municipalities. In written testimony, NLC acknowledged the growing gap between municipal costs for operation and maintenance of water systems and availability of funds and urged Congress to fully fund the Clean Water State Revolving Fund. President Bush’s FY 2008 budget request would appropriate only $688 million for the SRF, which would amount to almost a 50 percent reduction in funds over the FY 2007 appropriated amount. A House version of the proposal titled “Water Quality Financing Act of 2007” (H.R. 720) would authorize $20 billion in federal grants for fiscal years 2008 through 2012 for Clean Water State Revolving Funds. H.R. 720 is sponsored by Rep. James Oberstar (D-MN) and passed the House on March 9 by a vote of 303-108.
House Delays Consideration of Election Reform Bill
On Sep. 18, the House delayed consideration of a bill that would impose an unfunded mandate on states and localities. The bill, H.R. 811, the “Voter Confidence and Increased Accessibility Act of 2007 (the Act),” would require, by 2008, the use of certain voting machines that produce a paper trail. NLC, along with 11 state and local national organizations, sent a letter to Speaker Nancy Pelosi (D-CA) and Majority Leader Steny Hoyer (D-MD) urging the delay in consideration. Specifically, H.R. 811, introduced by our own Rep. Rush Holt (D-NJ), would require states and localities to replace equipment they purchased to comply with the Help America Vote Act of 2002, even if such equipment already offers a voter-verified paper trail, with technology that does not exist yet. The bill authorizes no funding to purchase new equipment. In addition, the legislation contains unnecessary and broad requirements for many states to enact hasty changes to their voting laws in the 14 months remaining between now and the 2008 Presidential election.
Senate Passes Anti-Gang Bill; House Measure Introduced
Last week, the Senate passed S. 456, The Gang Abatement and Prevention Act of 2007. The legislation, sponsored by Sen. Dianne Feinstein (D-CA), authorizes more than $1 billion over five years to support gang prevention, intervention, and enforcement efforts at the local level. NLC supported the legislation in a letter to the Senator. Also last week, Rep. Schiff (D-CA) introduced a companion bill, H.R. 3547, in the House that awaits consideration.
Senate Adopts Hate Crimes Amendment
On Sep. 27, the Senate adopted an amendment to the Defense reauthorization bill that would enhance current Hate Crimes Laws to include violent crimes based on sexual orientation, gender identity or disability. The amendment, the Matthew Shepard Local Law Enforcement Hate Crimes Prevention Act of 2007, would permit the federal government to investigate and prosecute crimes that are believed to be based on hate. Current hate crimes legislation covers race, religion, sex and age. Sen. Edward Kennedy (D-MA) and Sen. Gordon Smith (R-OR) originally introduced the language as a stand-alone bill, S. 1105. In a letter to the Senate, NLC supported the amendment.
Very truly yours,
William G. Dressel, Jr.
Executive Director
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