NATat Washington Report

JULY 7, 2006

The “NATaT Washington Report” is a monthly e-mail 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 issues including federal domestic funding, telecommunications, and local first responders, as well as a variety of other important federal issues. The Washington Report is produced by NATaT’s federal representative in Washington, The Ferguson Group. Contact NATaT federal director Jennifer Imo at 866.830.0008 or jimo@tfgnet.com for more information.

THE JULY 2006 WASHINGTON REPORT CONTAINS SUMMARIES OF THE FOLLOWING ISSUES:

• TELECOMMUNICATION


• APPROPRIATIONS AND BUDGET


• EMINENT DOMAIN


• ENVIRONMENT AND NATURAL RESOURCES: WATER RESOURCES DEVELOPMENT ACT


• HOUSING AND URBAN DEVELOPMENT - BLOCK GRANTS


• HOMELAND SECURITY


• PUBLIC SERVICE VOLUNTEERS

And Other Federal Issues of Note:

• FARM BILL


• ENVIRONMENT AND NATURAL RESOURCES: BROWNFIELDS


• JUSTICE


• TRANSPORTATION

TELECOMMUNICATIONS

On June 28th, the Senate Commerce, Science and Transportation Committee approved its version of the telecommunications bill. The legislation would, among other things, streamline the video franchising system by allowing telephone companies to obtain a national franchise to offer video service.

The Committee voted to defeat an amendment by Senator Olympia Snowe (R-ME), and Senator Byron Dorgan (D-ND), that would have required broadband providers to operate their networks in a non-discriminatory manner. The committee also voted to defeat an amendment by Senator John Kerry (D-MA) and Senator Barbara Boxer (D-CA) that would have required telephone companies providing video services to gradually build out their networks throughout any markets they enter. As a result of these two defeated amendments, many are concerned that the legislation has no safeguards to ensure that video and broadband providers would “build out” service to rural and low-income communities. “Redlining” groups on the basis of income, race or religion are prohibited, although there are exceptions. Various Senators have indicated that this issue will be a topic of debate on the Senate floor.

Other key elements include:

• The bill nationalizes cable franchising and requires the Federal Communications Commission (FCC) to issue a standard franchise application, whose use by municipalities or other franchising authorities is mandatory. Municipalities must grant such applications within 90 days of receipt, and failure to do so will cost them financial support for public, education and government (PEG) channels. The bill allows both telephone and cable companies to acquire a national franchise.


• The bill requires a national franchisee to provide as many PEG channels as the incumbent, with that number increasing every 15 years. It also directs the financial support for the PEG channels to be equal to the greater of 1 percent of gross revenues or that provided by the incumbent.


• The bill requires that franchise fees of up to 5 percent are provided for, with the fee to be determined by the municipality.


• The bill preserves elements of local control over rights of way.

Local government organizations and associations are united in their opposition to this version of proposed telecommunications reform, because it does not contain adequate provisions ensuring that local governments will maintain full control over their local rights of way, and maintain their long-standing local franchise authority to derive appropriate revenue and other benefits from telecommunications companies operating in their communities. Small towns and townships have the additional concern that this proposed law does not require build-out of telecommunications infrastructure in rural, small, and under-served communities. NATaT joins with the U.S. Conference of Mayors, the National League of Cities and other organizations in calling for major improvements to this proposed act before it moves forward.

APPROPRIATIONS AND BUDGET

The annual federal spending or “appropriations” bills provide funding for all of America’s activities, including domestic spending programs that provide resources to towns and townships, such as funding for infrastructure, transportation, public health, job training, and economic development. The House of Representatives passed all but one of its annual appropriations bills before Congress’ week-long July 4th recess. The remaining spending measure, Labor, Health and Human Services, Education, has been approved by the full House Appropriations Committee and is awaiting floor consideration. The Senate has not passed any of these bills; however, the full Senate Appropriations Committee has approved the following: Agriculture, Energy and Water, Foreign Operations, Homeland Security, Interior, and Legislative Branch. The remaining appropriations bills are scheduled for committee consideration by July 20th, but no floor consideration is scheduled. Once all of these spending bills are passed in the House and Senate, it is rumored that they will not be finalized in the House-Senate Conference Committees until after the November elections. For copies of the pending FY 2007 appropriations bills, see http://thomas.loc.gov/home/approp/app07.html.

EMINENT DOMAIN: THE POWER OF GOVERNMENT TO TAKE PRIVATE PROPERTY FOR PUBLIC USE, PROVIDED OWNERS RECEIVE JUST COMPENSATION

Just over one year ago, the U.S. Supreme Court decided in Kelo v. New London, CT that government's exercise of eminent domain to take private property for economic development purposes is a legitimate "public use". Over the past year, many Members of Congress have been looking for ways to counter the effects of that decision by introducing legislation that declares that the power of eminent domain shall be available for public use – but public use does not include economic development. Some of these measures would deny all federal funding to states or localities that allow the taking of private property for economic reasons. These bills are pending.

On June 23, 2006, President Bush issued an executive order stating that the federal government must limit its use of eminent domain. The order states that eminent domain shall not be used for economic development – despite the Supreme Court’s ruling to the contrary.

Many local governments and associations are opposing these congressional proposals to limit the land use authority of local governments.

Local governments should maintain the right to determine how local property is developed. It is an essential function of local government to manage growth and develop land use, zoning and planning policies. NATaT strongly opposes any sweeping Congressional legislation that punishes local governments that use the power of eminent domain for a justifiable economic purpose that benefits the entire community.

ENVIRONMENT AND NATURAL RESOURCES

Water Resources Development Act

The Water Resources Development Act (WRDA) authorizes several billions of dollars of U.S. Army Corps of Engineers projects related to navigation, ecosystem restoration, waterfront revitalization, water supply, flood control, environmental infrastructure, dredging, and other water resource projects.

On June 27th, Senate leaders agreed to terms for floor debate on the Senate’s version of WRDA, S. 728. Senate Leadership will most likely schedule floor time for the bill later this year.

S. 728 stalled since it was approved by the Senate Environment and Public Works Committee in April 2005, largely over concerns regarding prevailing wage matters and Army Corps of Engineers reform. The House version, H.R. 2864, passed the House in July 2005. 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 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.

HOUSING AND URBAN DEVELOPMENT - BLOCK GRANTS

On June 27th, the House Committee on Government Reform, Subcommittee on Federalism and the Census, held a hearing to explore a Department of Housing and Urban Development (HUD) proposal to reform the CDBG program: the Community Development Block Grant Reform Act.
While expressing support for some aspects of the Administration’s proposal, Subcommittee Chairman Michael R. Turner (R-OH) made clear that areas of concern remain. Three main elements of the Administration’s proposal are:
1) Formula Reform: The biggest problem claimed by HUD with the current formula is that grantees with similar needs are receiving significantly different per capita amounts. The formula proposed in the CDBG Reform Act takes a single-formula approach, which will apply to all grantees. It eliminates the existing structure of dual formulas and the 70/30 split between entitlement and state grantees. The new formula will use a common set of factors, listed below, that reflect community distress and fiscal capacity:

• Persons in poverty excluding full-time college students,


• Housing units over 50 years old and occupied by a poverty household,


• Female headed households with children under 18,


• Housing overcrowding, and


• Fiscal capacity (measured by per capita income of the community relative to the per capita income of its metropolitan area)

2)Incentives: The CDBG Reform Act would create a $200 million CDBG Challenge Grant. This fund would permit grantees to compete for additional funding to carry out community and economic development revitalization to improve the quality of life in distressed neighborhoods.
3) Performance Measurement: The CDBG Reform Act would enhance performance measurement requirements “to improve the effectiveness and viability of the program.” The Act would give HUD the authority to “hold grantees accountable.”
Several members of the Subcommittee expressed displeasure with the Administration’s proposed CDBG reform package. Some cited the lack of support for the proposal from groups such as the National League of Cities and the U.S. Conference of Mayors.

Towns and townships generally do not receive an entitlement to annual CDBG funding for economic development projects. NATaT encourages localities to review the criteria of the proposed CDBG Reform Act and to consider what type of block grant criteria could maximize CDBG funding to small communities experiencing distress and need. The proposal is at http://www.hud.gov/content/releases/2006-05-25cdbg.cfm.

HOMELAND SECURITY

Funding for “Critical Infrastructure”

On July 7th, the Department of Homeland Security (DHS) announced approximately $400 million in FY 2006 funding for programs to protect critical infrastructure. Those programs include:

• Port Security Grant Program: $168 million for grants to create sustainable, risk-based efforts for the protection of critical port infrastructure from terrorism. The Nation’s 100 most critical seaports (plus an additional seaport eligible in 2005), representing 95 percent of the foreign waterborne commerce of the United States, are eligible to participate in the port grant program. DHS pre-selects eligible ports prior to this announcement.


• Buffer Zone Protection Program Grants: The Buffer Zone Protection Program provides grant funding to build security and risk-management capabilities to secure critical infrastructure including chemical facilities, nuclear and electric power plants, dams, stadiums, arenas and other high-risk areas. In FY 2006, this program will award approximately $48 million in grant funds to state and local authorities. This program provides funding directly to state governments. Local governments must contact their state emergency management agencies to determine whether there is critical infrastructure in their respective areas.


• Chemical Sector Buffer Zone Protection Grant Program: The Chemical Sector Buffer Zone Protection Grant Program is a targeted effort that provides funds to build security and risk-management capabilities at the state and local level for chemical sector critical infrastructure from acts of terror and other hazards. Only the state governments of Michigan, California, Illinois, Indiana, New York, New Jersey, Texas, Pennsylvania, and Delaware are eligible to apply for this program. Local governments in those states must work with the state emergency management agencies and/or state environmental protection agency to determine whether chemical plants within or around their borders qualify for pass through funding under this program.

DHS should have forwarded application packages to eligible communities as part of their announcement process.

Homeland Security Appropriations

On June 29th, the Senate Appropriations Committee approved its FY 2007 Homeland Security Appropriations bill. Funding highlights include:

• $500 million, $45 million less than the House provided, for the State Homeland Security Grant Program;


• $350 million, $50 million less than the House provided, for the Law Enforcement Terrorism Prevention Grant Program;


• $745 million, $5 million less than the House FY 2007 level, for the Urban Area Security Initiative Program;


• $50 million, same as the House FY 2007 level, for the Buffer Zone Protection Program;


• $210 million, $10 million more than the House FY 2007 level, for the Port Security Grant Program;


• $655 million, $155 million more than the House FY 2007 level, for the Assistance to Fire Fighters Grant Program;


• $115 million, $75 million more than the House provided, for the Staffing for Adequate Fire and Emergency Response Grant program; and


• $180 million, $25 million more than the House FY 2007 level, for the Emergency Management Performance Grants Program.

Towns and townships continue to have major needs for emergency preparedness and first responders, particularly with respect to local firefighting and infrastructure security needs. NATaT urges Congress to maintain adequate funding for local firefighting and first responder grants, and to direct the Department of Homeland Security to provide such grants in a manner that recognizes the real needs of small communities struggling with local first responder capacity issues.

PUBLIC SERVICE VOLUNTEERS

H.R. 5607, Volunteer Firefighter and Emergency Medical Service Incentive Act of 2006

On June 14th, Representative Randy Kuhl (R-NY) introduced the Volunteer Firefighter and Emergency Medical Service Incentive Act of 2006 (H.R. 5607). The bill allows for a $2,000 refundable federal tax credit for individuals who are active members of volunteer fire departments and emergency medical service organizations. The tax credit will help localities retain volunteers while providing an incentive for recruiting future volunteers. In order to be eligible for the credit, an individual must be an active member of a qualified volunteer fire department at all times during the taxable year.

Currently, this legislation has no cosponsors and is pending before the House Ways and Means Committee. Representative Kuhl and his staff hope to get this legislation passed before the close of the 109th Congress.

H.R. 5355, Volunteer Firefighter Recruitment and Retention Act of 2006

On May 11th, Representative Melissa Hart (R-PA) introduced the Volunteer Firefighter Recruitment and Retention Act of 2006 (H.R. 5355). The legislation amends the Internal Revenue Code of 1986 to allow volunteer firefighters with eight or more years of service to receive a $1,500 tax credit. A volunteer who has completed three or more years of service will receive a $1,000 tax credit.

This legislation is pending before the House Ways and Means Committee and has no cosponsors.

Supporting Emergency Responders Volunteer Efforts Act of 2005 or the SERVE Act of 2005

In early 2005, Representative Maurice Hinchey (D-NY) and Senator Charles Schumer (D-NY) each introduced the Supporting Emergency Responders Volunteer Efforts Act of 2005 or the SERVE Act of 2005 (H.R. 934/S. 625). The bill would amend the Internal Revenue Code of 1986 to allow a $1,000 refundable credit for individuals who are bona fide volunteer members of volunteer firefighting and emergency medical service organizations. H.R. 934 also prorates the credit for part-year active members. This $1,000 annual tax credit for active members would serve as an important recruitment and retention tool.

H.R. 934 is pending before the House Ways and Means Committee, while S. 625 is pending before the Senate Finance Committee. This measure will not likely pass this year, but may be reintroduced in the 110th Congress.

Volunteer firefighters are integral to public safety in towns and townships. NATaT strongly supports these proposed laws, introduced by congressional members from NATaT member states, that would provide appropriate incentives and protections for the men and women who volunteer to serve their local communities through volunteer fire companies.

OTHER FEDERAL ISSUES OF NOTE:

FARM BILL

Most provisions of the current “farm bill,” The Farm Security and Rural Investment Act of 2002 (P.L. 107-71), expire in 2007. Reauthorization is expected in the 110th Congress (2007-08).

By the end of 2005, the U.S. Department of Agriculture had completed 52 public forums in 48 states to obtain public input for development of the 2007 Farm Bill. In March 2006, USDA completed summaries of the public comments, and released 41 summary papers that will serve as the basis of USDA policy and analysis in preparation for the next farm bill. (These summaries can be found at http://www.usda.gov/documents/Farm_Bill_Comments_Summary.htm.

Legislation that addresses rural development issues continues to be constrained by the budget. The 2002 farm bill included several initiatives aimed at rural economic development, including mandatory rural development programs to support innovative and alternative agricultural development, enhanced telecommunications access, renewable energy and biobased products, rural health care and health insurance, and new financial mechanisms for rural capital development. However, full funding for most of these programs has been blocked each year by appropriators.

The definition of “rural” is fluid. It varies among the federal programs from populations of 2,500 to 50,000. The 2007 Farm Bill will be an important vehicle to improve rural economic development. As the voice of America’s towns and townships, NATaT can provide invaluable input on the rural development title in the 2007 Farm Bill, and continue to encourage appropriators to fund these important economic development programs each year.

ENVIRONMENT AND NATURAL RESOURCES

Brownfields

In May, the House of Representatives approved $163.3 million in FY 2007 funding for the U.S. Environmental Protection Agency’s Brownfields Program, the amount requested in the Administration’s budget. Meanwhile, the Senate Appropriations Committee included the same amount in its version of the FY 2007 Interior and Environment Appropriations Bill, approved in June. While this amount is substantially less than the $250 million a year authorized by the Brownfields Revitalization Act, it represents a slight increase over the $162.5 million provided in FY 2006.

On June 13th, by a vote of 286-139, the House approved an amendment sponsored by Representative Gary Miller (R-CA) and Representative Eddie Bernice Johnson (D-TX) to restore $15 million for the U.S. Department of Housing and Urban Development (HUD) Brownfields Economic Development Initiative (BEDI). This amendment succeeded despite opposition from the Administration, which has tried for several years to eliminate funding for this program. The Senate Appropriations Committee is scheduled to consider its version of the FY 2007 Transportation, Treasury, and HUD Appropriations Bill during the week of July 17th.

On June 29th, Senator Carl Levin (D-MI), Senator Elizabeth Dole (R-NC), Senator Jack Reed (D-RI), Senator George Voinovich (R-OH), Senator James Jeffords (I-VT), and Senator Mel Martinez (R-FL) introduced legislation to strengthen the HUD BEDI program. The bill would authorize $50 million a year for HUD brownfields grants to local communities. It would also make the funding accessible to more communities by eliminating the requirement that BEDI grants be provided in conjunction with HUD Section 108 loan guarantees. In December, the House unanimously approved similar legislation sponsored by Representative Gary Miller and Representative Eddie Bernice Johnson.

Legislation titled “America’s Brownfields Cleanup Act” has been introduced in the House (H.R. 4480) by Representative Mike Turner (R-OH) and in the Senate (S. 3509) by Senator George Voinovich (R-OH). The proposed legislation would provide $1 billion annually in tax credits for activities conducted by landowners and developers to clean up, demolish structures, conduct site preparation, and upgrade site utilities at qualified brownfield sites. The tax credits would be administered by the States in accordance with state economic development plans and environmental cleanup programs. The proposed legislation is strongly supported by the U.S. Conference of Mayors and many other private and public sector organizations.

Towns and townships are impacted by brownfields at a variety of rural, suburban and urban sites including abandoned gas stations, sites polluted by agricultural chemicals and pesticides,
and former commercial and manufacturing sites. Towns and townships strongly support federal programs that provide seed funding for environmental assessment and cleanup, or resources for public and private sector economic reinvestment. NATaT urges Congress to increase brownfields funding for EPA and HUD, and to enact new laws to promote public and private sector investment in brownfields including the BEDI improvement bill and the brownfields tax credit bill.

JUSTICE

On July 29th, the House passed H.R.5672, its version of the FY 2007 Science, State, Justice, and Commerce Appropriations bill. House Members rejected the Bush Administration’s efforts to greatly reduce, and in some cases eliminate, popular grants for state and local law enforcement agencies.

Under H.R. 5672, $22.1 billion is provided for the Department of Justice, which includes $2.6 billion for assistance to state and local law enforcement, and $633 million for the Edward Byrne Justice Assistance program. President Bush proposed $1.2 billion for law enforcement assistance and called for eliminating the Byrne grants in his FY 2007 budget request. During final debate on H.R. 5672, the House rejected an amendment offered by Representative Joel Hefley (R-CO) that would have imposed a one percent cut to the bill’s total funding. Congressman Hefley’s amendment would have allowed the Administration to determine the accounts in which the reductions would be made.

The Senate Appropriations Committee will likely address its version of the bill in July.

These justice grant programs remain an important source of funding for towns and townships who need support for law enforcement equipment, technology, training, anti-drug and anti-gang assistance, and other local law enforcement activities. NATaT strongly supports the continuation of these programs that meet critical small community needs.

TRANSPORTATION

On June 23rd, Secretary of Transportation Norman Mineta announced his resignation. Secretary Mineta’s resignation will become effective July 7th. Possible successors include: Maria Cino, Deputy Secretary of Transportation; Michael P. Jackson, Deputy Secretary of the Department of Homeland Security; and Marion C. Blakey, Federal Aviation Administration Administrator.