Dear Mayor:

This is the latest bi-weekly update on action in our Nation’s Capital from the National League of Cities (NLC).

Senate Passes More Spending Bills
Early last week, the Senate approved funding for the Departments of Labor, Health and Human Services, and Education by a veto proof margin of 75-19. The legislation, H.R. 3043, includes modest funding increases for education, low income heating assistance, workforce development, and Ryan-White HIV/AIDS programs. The House approved funding for these agencies in July. After a conference committee meets to reconcile differences, the legislation will be forwarded to the President for signature or veto. The President has threatened to veto both House and Senate bills because they appropriate more funding than he requested.

As we reported previously, the Senate has approved funding for the Departments of Commerce and Justice and various science-related agencies, including $660 million for the Community Oriented Policing Services (COPS) program, $112 million more than fiscal 2007. The House approved funding for these agencies in July and included $725 million for COPS. The Senate also approved this funding by a veto-proof margin of 75-19. After a conference committee meets to reconcile differences, the legislation will be forwarded to the President for signature or veto. The President has threatened to veto both House and Senate bills because they exceed his budget request, which included only $32 million for the COPS Program. A Government Accountability Office report estimated that past COPS funding contributed to a 1.3 percent decline in the overall crime rate and a 2.5 percent drop in violent crime from 1993 to 2000.

Senate Introduces Climate Change Bill
Sen. Joseph Lieberman (I-CT) and Sen. John Warner (R-VA) have introduced climate change legislation to curb emissions of greenhouse gases thought to contribute to global warming. America’s Climate Security Act, S. 2191, would cap emissions from the electric power, transportation and manufacturing sectors of the economy and would allow businesses to trade emissions allowances in order to meet the cap. The bill also would limit emissions from covered sources at 1990 levels by 2015 and would require them to be 65 percent below 1990 levels by 2050. Additionally, the bill would establish a Carbon Market Efficiency Board, modeled after the Federal Reserve, to manage the carbon trading market if the price of emissions credits exceeded expectations. The Subcommittee of the Senate Environment and Public Works Committee that Sen. Lieberman Chairs held a hearing on the bill this week and will mark it up next week.

Mortgage Reform and Anti-Predatory Lending Act Introduced
House Financial Services Committee Chair Barney Frank (D-MA), along with North Carolina Representatives Brad Miller (D) and Mel Watt (D) introduced long-anticipated legislation to tighten regulation of the mortgage industry and to increase consumer protections in mortgage transactions. H.R. 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, would establish a minimum standard for all mortgages: Lenders would have to make a determination that borrowers have a reasonable ability to repay the loan. Also, the bill would bar financial incentives for mortgage originators based on the type of loan the borrower takes out and would require originators and brokers to be licensed under state or federal law. The bill also would establish liability for mortgage securitizers, who package loans into securities for sale in the secondary market. As expected, the lending industry has reservations about the bill. Chairman Frank hopes to pass the bill in the House before the Thanksgiving recess.

House and Senate Pass Temporary Internet Tax Moratorium Bills
On Oct. 25, the Senate approved a bill to extend the ban on state and local governments' ability to tax Internet access for another seven years, three years more than the four-year extension approved by the House last week. The current moratorium is scheduled to expire on Nov. 1. H.R. 3678, the Internet Tax Freedom Act Amendments Act of 2007, which was introduced by Rep. John Conyers (D-MI), Chairman of the House Judiciary Committee, originally extended the moratorium to 2011. The Senate version of H.R. 3678 provides for a 2014 expiration date. The bills, as approved by both the Senate and the House, clarify the definition of Internet access and maintain the grandfather provisions that protect state and local taxes imposed on Internet access prior to 1998. NLC, along with other state and local government groups, have endorsed the temporary ban as an alternative to proposed legislation that would make the Internet tax moratorium permanent. We will continue to lobby Congress for the shortest extension possible.

House Effort to Override Veto Fails; New SCHIP Bill Adopted
The House failed to generate the votes to override the President’s veto of the State Children’s Health Insurance Program (SCHIP) Bill. The vote (273-156) was 13 votes shy of the two-thirds majority needed for an override. In an effort to attract more votes for the bill, the vetoed SCHIP bill, a bipartisan compromise agreement, was revised to address three major areas of concern for Republicans who voted against the original compromise agreement. First, the revised bill expressly prohibits middle income families from participating in SCHIP. Second, it includes financial penalties to states that enroll illegal immigrants, and third, it limits adult coverage to pregnant women only. On Oct. 25, the revised bill passed the House 264-142, still 13 votes shy of the number needed to override a veto. This bill now moves to the Senate, which is expected to pass it in the next few days. The President has threatened to veto the revised bill, as well.

Senate Banking Committee Approves Terrorism Risk Insurance Extension
The Senate Banking, Housing and Urban Affairs Committee has approved The Terrorism Risk Insurance Program Reauthorization Act of 2007. The Senate Committee’s action follows House passage last month of a companion bill renewing the Terrorism Risk Insurance Act (TRIA), which is set to expire at the end of this year. Congress first passed TRIA in 2002 following the September 11th terrorist attacks to provide insurance coverage for terrorism events, which private policies widely exclude from coverage. While the House version of the bill calls for a 15-year extension of the federal terrorism insurance act, the Senate bill provides for only a seven-year extension. Both the House and Senate bills would extend coverage to domestic, as well as foreign, acts of terrorism. Different from the House bill, the Senate bill would not expand the program to require insurers to offer nuclear, biological, chemical, and radiological attacks coverage. The Senate version keeps the current $100 million trigger for coverage, unlike the House bill, which reduces the threshold triggering coverage from $100 to $50 million. The Senate has not yet scheduled a vote on the bill by the full Chamber.

Senate Committee Approves Flood Insurance Reauthorization Bill
A Senate Committee has passed legislation to reauthorize the nation’s flood insurance program through 2013. The House passed similar legislation last month. Following the record claims resulting from Hurricanes Katrina, Rita, and Wilma in 2005, the program had to borrow from the federal Treasury, leaving the program with more than $17.5 billion in debt. The Senate Committee’s version of the legislation is consistent with the House efforts to restore the program’s financial solvency by forgiving the borrowed debt. Both versions of the bill phase out subsidized rates on commercial properties, vacation homes, and second homes built before 1974 and increase the amount the Federal Emergency Management Agency (FEMA) could raise policy rates in any given year from 10 percent to 15 percent. Both bills require FEMA to review the nation’s flood maps and provide more money for updates. In a key difference between the two bills, the Senate rejected the wind-damage protection provision adopted by the House. The lack of the wind-damage protection remains a contentious issue in the Senate, raising objections from Senators from the Gulf Coast region, who argued that, without the coverage, homeowners will not have enough security. Other Senators, the White House, and the insurance industry oppose the additional coverage because it would displace insurance already provided by the private market. This issue and the need to find budget off-sets to pay for the debt forgiven make reauthorization of the program in 2007 unlikely.

House Passes Rail Safety Legislation
As previously reported, the House has passed H.R. 2095, the Federal Rail Safety Improvement Act of 2007, by a vote of 377-38. The measure would almost double the number of rail safety inspection and enforcement personnel; would require that employees have at least 10 hours off per day and prohibit work shifts longer than 12 consecutive hours; and would impose restrictions on “limbo time,” such as when workers travel to a point of release after their shift ends. The bill also would authorize a total of $1.1 billion through fiscal year 2011 for the Federal Railroad Safety Administration, whose last reauthorization expired in 1998. The House also adopted several amendments to the bill. An amendment sponsored by Rep. James Oberstar (D-MN), chair of the House Transportation and Infrastructure Committee, would require the rail agency to issue new safety regulations for bridges that have railroad tracks on them. An amendment sponsored by Rep. Frank Pallone, Jr. (D-NJ), would prevent the Surface Transportation Board from pre-empting local or state environmental laws on solid-waste transfer facilities.

Senate Debates Amtrak Reauthorization
Last week, the Senate continued debate on S. 294, the Passenger Rail Investment and Improvement Act of 2007 (PRIIA), that would reauthorize Amtrak and provide $11.4 billion for the rail system over the next six years. PRIIA’s co-sponsors are Sen. Frank Lautenberg (D-NJ) and Sen. Trent Lott (R-MS). During the debate, the Senate defeated Sen. John Sununu’s (R-NH) amendment to cut funding for any Amtrak route requiring a federal subsidy of at least $200 or more per passenger and would have lowered the subsidy threshold by $25 each year until it reached $100 per passenger. The amendment, which NLC opposed, would have negatively impacted the long-distance rail network through the possible elimination of several routes. This week when debate continues, the Senate will consider an amendment offered by Sen. Wayne Allard (R-CO) that would preserve the current statutory requirement that Amtrak become financially self-sufficient. S. 294 would eliminate that requirement. NLC opposes the amendment for the same reasons that Sen. Lautenberg does: No country in the world has been able to successfully operate a national passenger rail service without government subsidies.

For more information, contact Jon Moran at 609-695-3481, ext. 121 or jmoran@njslom.com.

                                                                        Very truly yours,

                                                                        William G. Dressel, Jr.
                                                                        Executive Director