Dear Mayor:

Here is where things stood in Congress at the end of last week, as reported by the National League of Cities (NLC). NLC will produce similar updates on a bi-weekly basis, whenever Congress is in session and dealing with issues important to local government. We will pass along those updates important to New Jersey municipalities.

$120 Billion Emergency Appropriations Bill with Minimum Wage Increase Becomes Law
Last week, the Senate and the House passed, and the President approved, a $120 billion emergency appropriations bill. Nearly $95 billion of the funding in the bill is for military operations in Iraq and Afghanistan, base closure assistance, and African food aid. The remaining $22.15 billion is for domestic programs. Of immediate importance to cities and towns may be the provision that raises the minimum wage from $5.15 to $7.25 per hour over the next two years. The increase will take effect in three phases. The first increase will take place on or about August 1, 2007, when the minimum wage will increase by 70 cents to $5.85 per hour. On or about August 1, 2008, the minimum wage will increase again to $6.55 per hour. The final increase to $7.25 per hour will occur on or about August 1, 2009.
Domestic programs that were funded with the bill include:

• Hurricane relief- $6.3 billion in additional funds for those areas affected by the 2005 hurricane season for the Federal Emergency Management Agency and the Army Corps of Engineers;
• Agriculture assistance- $3 billion for crop disaster and livestock assistance primarily in the western United States;
• Homeland security-$1 billion for anti-terrorism expenses including aviation, rail and transit security;
• State Children’s Health Insurance Program- $650 million to eliminate the fiscal year 2007 funding shortfall faced by 14 states that would have had to shut down their health insurance program for children in low income families that are not eligible for Medicaid; and
• Wildfire suppression- $465 million for wildfire suppression.
  (Neil Bomberg, bomberg@nlc.org, 202.626.3042)

Senate Begins Debate on Immigration Reform Legislation
The Senate will return to Washington next week and renew the contentious debate over the compromise immigration reform legislation crafted by a bipartisan group of Senators and the White House. Before leaving for the Memorial Day recess, the bill, S 1348, the Comprehensive Immigration Reform Act of 2007, survived a series of amendments aimed at gutting some of the provisions in the fragile compromise.

The compromise on S 1348 includes funding to state and local governments for health and education expenses related to a new guest worker program, impact fees to cover some state and local costs and a new Office of Citizenship and Integration to provide grants to states and municipalities for the creation of New Americans Integration Councils to provide services to integrate immigrants into the community.

During debate before leaving for the recess, the Senate defeated, 48-49, an amendment by Sen. Norm Coleman (R-MN) that would have allowed officials of federal, state, or local government entities to question individuals about their immigration status if the officials have probable cause to believe the individuals lack legal status, the so called “sanctuary provisions.” The House has not begun consideration of a specific bill yet, although the House Judiciary Subcommittee on Immigration, Citizenship, Refugees, Border Security, and International Law has held almost a dozen hearings on immigration issues including one on the impact on state and local governments. House Immigration Subcommittee Chair Zoe Lofgren (D-CA) will wait for the Senate to complete action on S 1348 before beginning consideration of specific legislation. (Leslie Wollack, wollack@nlc.org, 202.626.3029)

Senators Introduce Compromise Legislation to Extend Internet Tax Moratorium
Last week, Sens. Tom Carper (D-Del.) and Lamar Alexander (R-Tenn.) introduced legislation that would extend the current moratorium on taxes on Internet access for another four years. S 1453 extends the original 1998 moratorium that is scheduled to expire on November 1. Besides extending the moratorium, the legislation clarifies the definition of “Internet access” and preserves the grandfather clause in the original legislation that protects state and local taxes imposed on Internet access prior to 1998. Although state and local government groups consistently oppose federal interference with their authority to develop and manage their revenue systems, NLC, the National Governors Association, the U.S. Conference of Mayors and the National Association of Counties support the extension of a temporary moratorium as an alternative to legislation introduced in this session of Congress that would make the Internet tax moratorium permanent. The bill’s other cosponsors are Sens. Michael Enzi (R-WY), Dianne Feinstein (D-CA) and George Voinovich (R-OH). In a Senate Commerce, Science, and Transportation Committee hearing last week, Chairman Daniel K. Inouye (D-HI) acknowledged the phenomenal growth in the Internet since the original act was passed and his preference for a temporary extension, rather than a permanent one. (Christina Loftus, loftus@nlc.org, 202.626.3173)

Senate Introduces Streamline Tax Proposal
On May 22, 2007, Senator Michael Enzi (R-WY) introduced the Sales Tax Fairness and Simplification Act (S 34), a bill designed to simplify the administration and collection of state and local sales taxes. The bill would allow those states that have complied with the Streamlined Sales and Use Tax Agreement (SSUTA) the authority to require out-of state sellers to collect sales tax on remote sales. Collection of sales and use taxes on catalog and Internet purchases could result in billions of additional dollars in sales tax revenue for states and local government each year. While the National League of Cities supports simplification of the sales and use tax system, local governments have serious concerns with the provision in Senate Bill 34 mandating state administration and collection of local telecommunication taxes and fees. NLC continues to work with its national partners to form a strategic approach to opposing any preemption of local government’s authority to administer and collect its own telecommunications revenues. (Christina Loftus, loftus@nlc.org, 202.626.3173)

House Transportation Committee Leaders Warn States on Public-Private Partnerships Involving National Highways
A letter to governors, state legislators and state department of transportation heads from House Transportation Committee Chair Jim Oberstar (D-MN) and Subcommittee Chair Peter DeFazio (D-OR) warning States against rushing into public-private partnerships (PPPs) on national highways has caused much concern in state capitols. “Although we invite all financing options to be on the table as we evaluate opportunities to increase investment in our nation’s infrastructure, we strongly caution you against rushing into PPPs that do not fully protect the public interest, the integrity of the national system, and which do not constitute a sustainable national system of transportation financing,” the Chairmen wrote in a May 14 letter. Expressing concern over the ultimate benefits of leasing toll facilities to private operators, the letter also cited the Administration’s promotion of the partnerships. The letter warns States that the Committee might consider action against these projects in the next surface transportation bill in 2009. Also in the letter, the Chairmen warn States, "The Committee will work to undo any state PPP agreements that do not fully protect the public interest and the integrity of the national system.” The US Department of Transportation has been promoting the so-called PPPs as an answer to reduced federal transportation funding, including release and distribution of model state legislation that could be used to establish these partnerships. The full text of the letter is available at:
http://transportation.house.gov/Media/File/Full%20Committee/PPP%20letter%20to%20Govs%2005-14-07.pdf. (Leslie Wollack, wollack@nlc.org, 202.626.3029)

NLC Participates in Energy Coalition
For the past six months, NLC has participated in a coalition chaired by former Senator John Breaux (D-LA) and former Mayor Beverly O’Neill, Long Beach, California, aimed at building consensus among a wide range of organizations on energy policy recommendations for the nation. The coalition has brought together both energy producers and large consumers of energy to identify potential areas of agreement for recommendations on energy supplies, transportation energy issues and conservation, efficiency and environmental protection. Coalition members currently are reviewing proposed final recommendations. State and local government groups have worked to ensure that the final recommendations do not include mandates and preemption of state and local authority on energy facility siting and other land use issues. More information on the Energy Initiative is available at: http://www.theenergyinitiative.org/about.php. (Leslie Wollack, wollack@nlc.org, 202.626.3029)

OSHA Releases Influenza Guide for Healthcare Workers and Their Employers
In an effort to provide public and private healthcare workers with safety guidelines around caring for patients with pandemic influenza (of which avian influenza is one type), the US Department of Labor’s Occupational Safety and Health Administration (OSHA) recently released “Pandemic Influenza Preparedness and Response Guidance for Healthcare Workers and Healthcare Employers.” The publication provides private and public healthcare systems, including those operated by cities, with a broad set of guidelines on how to treat patients suspected of having pandemic influenza, as well as strategies for insuring the health and well-being of healthcare workers. According to the Department, the guide, which was not released as a standard or regulation and therefore does not have the force of law, was designed to provide guidance on how to prepare and respond to pandemic influenza. A downloadable PDF version of the document can be found at: www.osha.gov/Publications/OSHA_pandemic_health.pdf. More general information on addressing pandemic influenza can be found at: http://www.pandemicflu.gov/.
(Neil Bomberg, bomberg@nlc.org, 202.626.3042)

Federal Reserve Board to Hold Hearing on Abusive Lending Practices
On June 14, the Federal Reserve Board will hold a hearing to seek input on whether it should exercise its authority under the Home Ownership and Equity Protection Act (HOEPA) to issue new rules and regulations to curb abusive lending practices in the home mortgage market, including sub-prime and "predatory" loans. The hearing comes in response to the nationwide increase in mortgage foreclosures, concerns expressed by Wall Street mortgage investors, and the urging of Senate Banking Committee Chair Chris Dodd (D-CT) and House Financial Services Committee Chair Barney Frank (DMA). NLC leadership identified reform of the mortgage finance system as one of its top congressional priorities for 2007 and will submit testimony at the upcoming hearing urging the Federal Reserve to exercise its regulatory authority to propose new rules to preserve homeownership for more families. (Mike Wallace, wallace@nlc.org, 202.626.3025)

AGENCIES

NLC Files Comments in Response to FCC’s FNPRM Concerning Band Plan and Frontline Wireless Proposals
On May 23, NLC, the National Association of Telecommunications Advisors, the National Association of Counties, and the U.S. Conference of Mayors filed joint comments with the Federal Communications Commission concerning among other things: (1) various band plan proposals for auctioning commercial spectrum in the 700 MHz band; (2) performance requirements; (3) redesignation of public safety wideband spectrum for broadband use; and (4) a proposal put forth by Frontline Wireless that requests the Commission to “alter the upper portion of the Upper 700 MHz Commercial Services Band to designate a 10 megahertz “E Block” for a commercial licensee and to impose specific conditions on that licensee requiring it to construct and operate a nationwide, interoperable broadband network for sharing with a national public safety licensee providing broadband service in the lower portion of the 700 MHz Public Safety spectrum.” (To view the comments, click here.) (Christina Loftus, loftus@nlc.org, 202.626.3173)

                                                                        Very truly yours,

                                                                        William G. Dressel, Jr.
                                                                        Executive Director