JANUARY 31, 2007

The “NATaT Washington Report” is a monthly email newsletter that provides timely information to town and township officials on the legislative, regulatory, funding, and policy decisions in Washington that could affect your communities. The Washington Report focuses on NATaT’s primary federal issues. The Washington Report is produced by NATaT’s federal representative in Washington, The Ferguson Group. For more information on the legislation described in this report, see http://thomas.loc.gov/ or contact The Ferguson Group. Contact NATaT federal director Jennifer Imo at 1.866.830.0008 or jimo@tfgnet.com for more information.

THE JANUARY 2007 WASHINGTON REPORT CONTAINS SUMMARIES OF THE FOLLOWING ISSUES:

• APPROPRIATIONS AND BUDGET
• ENERGY
• ENVIRONMENT AND NATURAL RESOURCES
• HOMELAND SECURITY
• NATIVE AMERICAN LEGISLATION IN THE 110TH CONGRESS
• VIDEO FRANCHISING

APPROPRIATIONS AND BUDGET
Congress passed two fiscal year (FY) 2007 appropriations bills before adjourning in December 2006: Homeland Security and Defense. The new Chairmen of the House and Senate Appropriations Committees, along with the Democratic House and Senate leadership, announced that Congress will not pass the remaining spending bills individually, but instead pass a long-term joint resolution to keep the federal government in operation through the end of FY 2007 (September 30, 2007). On January 31st, the House passed H.J. Res 20, the joint resolution appropriations plan for FY 2007. H.J. Res 20 did not include any earmarks. The Senate is expected to consider the joint resolution in early February.

H.J. Res 20 funds government agencies at FY 2006 levels, with some additions in funding to certain agencies. At this time, it is still unclear how each federal agency will allocate its non-formula funding. Some agencies are expected to conduct grant competitions for this funding, which otherwise would have been earmarked by Congress. Some other agencies have been prohibited from providing grants in certain programs, and other agencies may decide to not conduct such grants.

Leaders in the new 110th Congress have vowed to proceed as usual with the FY 2008 appropriations process, and have specifically declared their intent to include earmarks in the individual spending bills. There are proposed changes to the process, but those changes can only benefit local government entities. The new Congress wants transparency in the appropriations process, meaning that the Member of Congress who request and secure funding for a project in an individual bill will be named as the project’s sponsor. It is important to keep in mind that projects driven by local elected officials with community-wide support are not the projects that a Member of Congress would shy away from publicly supporting.

Federal appropriations bills include funding for hundreds of domestic programs that support agriculture, rural development, small business, economic development, public safety and criminal justice, education, energy, water resources, environmental protection, health and human services, housing, community development, job training, transportation infrastructure, and other issues that are vitally important to town governments. Nearly 100 programs are “earmarked” for projects in local communities. The federal budget is under substantial pressure, and many domestic funding programs have been proposed for elimination by the President and some congressional members. Towns and townships need to work directly with their congressional delegations and federal agencies in order to potentially access FY 2007 grants and/or FY 2008 congressional earmarks.

ENERGY
The month of January saw a renewed focus on U.S. energy policy. The House of Representatives included energy as part of their “first 100 hours” agenda. On January 18th, the House passed H.R. 6, Creating Long-Term Energy Alternatives for the Nation (CLEAN) Act of 2007. H.R. 6 repeals certain tax breaks for oil and gas exploration, and repeals royalty incentives enacted as part of the Energy Policy Act of 2005. The increased tax receipts (approximately $14 billion) generated by H.R. 6 are dedicated to a new Strategic Energy Efficiency and Renewables Reserve fund, which will be used to offset the costs of future renewable energy and efficiency legislation. In the Senate, Senator Jeff Bingaman (D-N.M.), Chair of the Energy and Natural Resources Committee, has announced the committee will consider several energy related bills over the next several months. Senator Bingaman also indicated his intention to pass legislation requiring 15 percent of the nation’s energy be produced by renewable sources by 2020. In the State of the Union address, President Bush called on the country to reduce gasoline consumption by 20 percent in the next 10 years, principally to be accomplished by requiring 35 billion gallons of alternative fuels be blended with gasoline on an annual basis by 2017.

Towns and townships are directly affected by federal energy programs and policies. Local communities seeking to boost the use of renewable sources of energy for transportation and buildings can be supported with federal funding, including for biomass fuels and renewable electricity generation. NATaT will be seeking to ensure that towns and townships can benefit from energy policies and programs that promote clean energy in small and rural communities.


ENVIRONMENT AND NATURAL RESOURCES
Water Resources Development Act (WRDA)
Since the long overdue WRDA bill did not pass Congress in the remaining legislative days of the 109th Congress, it must be reintroduced in both chambers in the 110th Congress. Furthermore, the change in leadership in both chambers shifted many WRDA priorities, so Congressional staff have indicated that they will be drafting new bills rather using the bills introduced in the 109th Congress.

Both Chairs of the House and Senate Committees with jurisdiction over WRDA have signaled that WRDA is one of their biggest priorities and they plan to draft new bills right away. In fact, Senate staff has indicated that they are aiming to have a bill by March 31st.

While the legislation should be passed every two years, Congress has not passed a WRDA bill since 2000.

Many towns and townships are directly involved or affected by water resource projects on their local rivers, lakes, coasts, canals, reservoirs, and wetlands. NATaT supports the passage of WRDA legislation that is badly needed to support local water resource improvements and projects. WRDA legislation should include increased funding for local projects, improvements to the Corps planning process to reduce delays in Corps projects, fair cost-share methodologies for local project sponsors, and broadened Corps authorities to support local waterfront revitalization.

HOMELAND SECURITY
House Democrats pledged that as one of their first acts in the majority, they would pass legislation that would fully implement the recommendations from the 9/11 Commission. In fulfilling that promise, the first bill of the 110th Congress was H.R. 1, the “Implementing the 9/11 Commission Recommendations Act.” On January 9th, the bill passed 299-128. In the Senate, Homeland Security and Government Affairs Chairman Joseph Lieberman (I-CT) announced that his committee will hold hearings on the matter and will introduce their own legislation by February. His committee is not expected to draft parallel legislation to H.R. 1, thereby setting up the need for a conference between the two bills. The following is a summary of the provisions of H.R. 1 that are relevant for local governments.

Current Homeland Security Grant Programs
Distribution
The bill would change the distribution method for the State Homeland Security Grant Program (SHSGP) and the Local Law Enforcement Terrorism Prevention (LLETP) Program by lowering the minimum state award. Currently, each state receives a base award of .75% of the total annual appropriation for SHSGP, with the remainder distributed based on each state’s risk profile. H.R. 1 would lower the minimum state award to 0.25% of the annual program appropriation, and provide a guarantee of 0.45% to states that have an international border or that abut a body of water with an international border. The remaining program funds would be distributed based on each state’s risk profile. H.R. 1 would also codify the current distribution methods for the Urban Area Security Initiative (UASI).

The bill explicitly makes no changes to the Assistance to Fire Fighters Grant Program (FIRE Act Grants), Staffing for Adequate Fire and Emergency Response (SAFER) Grant Program, and the Emergency Management Performance Grant (EMPG) Program.

Application Procedures/Eligibility
The bill contains provisions from the “Faster and Smarter Funding for First Responders Act,” was passed by the House in 109th Congress that would dramatically change the process by which state and local governments apply for SHSGP, UASI and LLETP. H.R. 1 would permit states, urban areas, regions (broadly defined), and tribal governments to apply for these programs. DHS would allow regions, urban areas, and states to compete under SHSGP, UASI, and LLETP. Given the history of these programs, should the Congress approve this provision of the House bill, it is likely that the Secretary would restrict SHSGP and LLETP to states (which would still pass through 80% of their award to local governments).

Pass-Through Requirement
States would still have to pass at least 80% of the grant funds to local governments, First Responders or other eligible local groups, within 45 days. While states may petition for an extension beyond that period, failure to meet the requirement without an extension would result in a termination of direct federal-to-state payments. In such a case, DHS would make awards directly to local governments but in accordance with the approved spending plan for their state.

Use of Grants
Grant funds would not be used to supplant state or local funds, construct facilities, acquire land, or cover state and local cost-sharing contributions. The bill does permit applicants to request departmental approval for using funds to reimburse costs associated with state and local government agencies carrying out duties that are usually performed by the federal government, but are being carried out by the local agency under an agreement with the relevant federal entity. Such activities would have to be directly related to homeland defense. The federal cost share would be 100% for the first two years, and 75% thereafter. The bill also mandates additional reporting requirements for applicants wishing to use grant funds to acquire equipment that does not meet current performance standards for First Responders. Awards under all the aforementioned programs would be prioritized based on the extent to which they would help reduce the threats of, vulnerabilities to, and consequences for persons and critical infrastructure.

Interoperability Grants
The bill would establish a new stand-alone grant program to be called the Improve Communications for Emergency Response Grant Program. It would provide grants to states and regions (but not specifically or directly to local governments) to carry out initiatives to improve interoperable emergency communications. The measure permits the use of funds for various purposes, including communication planning, acquisition of communications equipment and system development, simulations, technical assistance and training. These grants could be used for solutions on a regional, statewide, national, or international basis. Under the bill, regions would be defined as combinations of contiguous local governments or non-contiguous local governments that share mutual aid agreements. There would be no minimum population requirement.

The measure authorizes such sums as may be necessary in the first fiscal year after certain criteria are met, including completion of a National Emergency Communications Plan, completion and submission of “baseline” operability and interoperability assessments, and a determination by DHS that there has been substantial progress made toward establishing emergency communications equipment and technology standards.
Many towns and townships have risks to local homeland security, and have needs for federal funding to protect against those risks. However, the homeland security funding provided by the federal government is heavily focused on urban areas, high security risk areas, and state-based security plans. Towns and townships with genuine homeland security needs must demonstrate those needs and work in partnership with their larger regions and states to be included in state-based homeland security spending plans. Critical programs for towns and townships include FIRE grants and interoperability communications grants. These programs can fund small community projects but, again, towns/townships need to coordinate with regional and state authorities to demonstrate genuine need. NATaT supports approaches that provide additional grant funding to all communities, including small towns, for these needs.

NATIVE AMERICAN LEGISLATION IN THE 110TH CONGRESS
H.R. 1: Implementing the 9/11 Commission Recommendations Act of 2007 generally implements the 9/11 commission recommendations; and specifically provides funding to eligible Tribes for first responder equipment, training and overtime/additional personnel costs associated with heightened threat levels. Tribes, like local governments, must work through/with the State to receive funding. The bill was passed by the House on January 9th as part of Democrats’ “first 100 hours,” and is awaiting Senate action.

H.R. 54: Teacher Recruitment Act of 2007 is a measure that would expand the eligibility of individuals to qualify for loan forgiveness for teachers in order to provide additional incentives for teachers currently employed or seeking employment in economically depressed rural areas, Territories, and Indian Reservations. The bill was referred to the House Education and Labor Committee.

H.R. 155: Lower Brule and Crow Creek Sioux Compensation would provide compensation to the Lower Brule and Crow Creek Sioux Tribes of South Dakota for damage to tribal land caused by Pick-Sloan projects along the Missouri River. The bill was referred to the House Natural Resources Committee.

H.R. 318: Elementary and Secondary Education Act Impact Aid would amend the Elementary and Secondary Education Act of 1965 to revise impact aid program requirements for distribution of school construction payments, and of school facility emergency and modernization grants, to local educational agencies impacted by military dependent children or by children residing on Indian lands.

H.R. 545 / S.85 / S.267: Native American Methamphetamine Enforcement and Treatment Act. These bills would amend the Omnibus Crime Control and Safe Streets Act of 1968 to include territories and Indian tribes as eligible grant recipients under the programs to: (1) address the manufacture, sale, and use of methamphetamine; (2) aid children in homes in which methamphetamine or other drugs are unlawfully manufactured, distributed, dispensed, or used; and (3) address methamphetamine use by pregnant and parenting women offenders. The House legislation was referred to the House Judiciary Committee and Energy and Commerce Committee, and the Senate bills were referred to the Senate Judiciary Committee.

Many towns and townships are affected by tribal activities taking place within their jurisdictions. NATaT members support initiatives that will help tribal communities become sustainable, healthy places. At the same time, towns and townships seek federal and state requirements that casino operations, which can have major impacts on local quality of life, are conducted in a manner that mitigates negative impacts and provides a fair share of resources for local services.

VIDEO FRANCHISING
Local Franchise Authorities (LFAs) remain very concerned about the Federal Communications Commission’s (FCC) approval of rules that will make it easier for the major phone companies such as Verizon and AT&T to provide video services in direct competition with cable television. The new rules are meant to spur more competition for cable television providers. They require local governments to speed up the approval process for new competitors, cap the fees paid by new entrants and ease requirements that competitors build systems that reach every home.

On December 20th, the policy change was approved. Local government officials have been angered by the ruling and claim that the agency overstepped its authority and now promise a legal challenge. The vote also has drawn the threat of a legislative fix from members of Congress with jurisdiction over the FCC. Opponents of the FCC's action say the new rules amount to a "federalization" of the cable franchising process. They contend the change will mean a loss of local oversight, fewer dollars for public and government access channels and the possibility of "cherry picking" by companies that choose to serve only the richest neighborhoods. Supporters of the policy change have cited dozens of instances in which local governments have made unreasonable demands of new competitors, effectively blocking them from offering service. Companies such as Verizon and AT&T are spending billions of dollars to lay fiber-optic cable in their service areas hoping that they will be able to compete with the cable television industry. There also has and continues to be state franchise legislation enacted to help speed the deployment of video services by the phone companies.

The National Association of Telecommunications Officers and Advisors, a trade group that represents local governments on cable franchising issues, has hired a law firm to challenge the decision. The group is joined by the National League of Cities, the National Association of Counties, and others. A court challenge cannot take place, however, until the FCC releases the final version of the new rules. That is expected soon.

Local government organizations and associations are united in their opposition to the FCC’s decision. Local governments rely on the revenue from their long-standing local franchise authority. Small towns and townships have the additional concern that there is no requirement that telecommunications infrastructure be built out to rural, small, and under-served communities.