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2006-2007 Policies for the Jurisdiction of the:
Economic Development, Trade and Cultural Affairs Committee

Economic Development, Trade and Cultural Affairs
Standing Committee Main Page
Staff Contacts

Policies:

Agricultural Trade  (Joint with Agriculture and Rural Development Committee)

America's farms and ranches currently export approximately 30 percent of their production.  These exports buttress the nation's balance of payments and are important to the well-being of the entire American economy.  Farm exports are essential to the financial health of American agriculture and to the economic development of American states.

However, the agriculture sector is no longer a net positive for America’s balance of payments and 2005 saw an historic change.  For the first time in over a century, Americans spent more on imported foods and spirits from abroad than farmers were able to sell overseas.  This change only underscores the importance of agriculture in trade negotiations and the need to open foreign markets to American agricultural products.

Trade Agreements

Protectionist trade practices and export subsidies of other countries often effectively limit American agricultural exports.  The United States and its trading partners therefore should seek agreements that reduce and eventually eliminate the reliance on protectionist trade policies and practices.

The National Conference of State Legislatures (NCSL) supports the federal government’s efforts to negotiate trade agreements that secure free and open access to overseas markets for American agricultural products.  In this connection, NCSL supports the President’s ability to negotiate trade agreements in accordance with the federalism and policy principles outlined in NCSL’s Presidential Trade Promotion Authority policy.

In negotiating new agreements, special attention should be placed on import quotas that thwart international trade opportunities.

Trade negotiations also should result in provisions that will speed resolution of cross-border disputes while respecting American values of due process and federalism.

The Doha Round of World Trade Organization negotiations has opened new discussions regarding agricultural trade and the trade-distorting effects of subsidies.  While talks are laborious and tenuous, NCSL supports the federal government’s efforts to work through these multilateral negotiations to open markets that are currently closed to U.S. products and to reduce the use of trade-distorting subsidies.  State legislators recognize that some U.S. trading partners view some current U.S. farm support programs as trade-distorting under WTO rules.  NCSL recognizes the importance of rural development supports while acknowledging the need to design such farm programs so that they do not conflict with WTO rules.  With this in mind, NCSL looks forward to an active engagement with congressional leaders, U.S. negotiators, and USDA officials regarding how these programs can be better designed to support rural prosperity while also complying with U.S. trade obligations. Further, NCSL encourages the Congress and the Administration to expand Trade Adjustment Assistance programs or efforts to convert farm supports to non-trade distorting support programs, such as environmental conservation, local food purchasing, conversion to biofuel crops, alternate crop conversion, or expansion of non-farm income generating opportunities in order to help America’s farm communities adapt, adjust to, and fully exploit new agricultural markets.

In addition to global negotiations under the WTO, NCSL supports bilateral and regional Free Trade Agreements (FTAs) that similarly open markets to American agricultural exports.

State legislators are nonetheless concerned that U.S. offers in these negotiations could unexpectedly and adversely affect state economies.  The federal government should notify the states of any potential impacts that U.S. subsidy reductions may have on regions, jobs, or tax bases.

While expanded international trade in agricultural products as a result of new trade agreements creates new opportunities for American exports and increased revenues, it also creates new burdens for both federal and state agriculture inspection and quarantine services.  NCSL calls upon the federal government to support training for inspection professionals and the development of new technologies to secure the health and safety of imported foods and agricultural products.

If any of our trading partners refuse to remove unnecessary trade barriers or persist in violations of international trade laws and agreements, the President should  restrict their imports of agricultural products or livestock into this country.  Similarly, NCSL supports the federal government’s decision to challenge some of our trading partners’ decisions regarding the importation of genetically modified foods.

Market Development

To enhance agricultural exports, Congress and the Administration should support an aggressive market development effort for agricultural products, including the use of export credits.  Emphasis should be placed on developing markets for high-value products.

In addition to traditional commodity sales programs, food aid can be a valuable tool in market development.  Current programs, however, should be redirected to encourage, rather than to discourage, the development of local food security in nations facing food shortages.  Surplus stocks of grain and other commodities should be used for distribution to less-developed nations.

Trade Embargoes

In order to recapture and maintain foreign markets, the United States must demonstrate that it is a reliable supplier.  To ensure that past mistakes in the use of foreign trade embargoes are not repeated, NCSL opposes any embargo of agricultural products, unless that embargo includes all trade with the target country.  NCSL supports the dissolution of the embargo on exports to Cuba for food products and medicine.

Trade Policy Development

The Secretary of Agriculture and other public officials representing agriculture should be included as full and equal partners in the formulation of United States policies affecting foreign trade.  USDA should in turn cooperate with state agricultural trade officials in a coordinated effort to promote agricultural exports.  State legislatures, both directly and through NCSL, should be consulted on the development of trade policies and kept abreast of evaluations of their efficacy and economic impact.  In particular, NCSL supports the appointment of one or more state legislators to the U.S. Trade Representative’s Agriculture Policy Advisory Committee (APAC).

Export Finance

Existing agricultural export finance programs and other financing institutions, such as the Export-Import Bank, should be bolstered to assist American producers in capturing foreign agriculture sales.

Grain Quality

The National Conference of State Legislatures urges the Congress to monitor closely the impact of the recent reforms in grain quality standards.  Additional legislative remedies should be considered if American farmers lose sales because of the sale of commodities which, although they meet legal standards, are nonetheless inferior in quality to foreign grain exports.

Further, NCSL encourages efforts to stem the costs of export grain inspection, while maintaining the integrity and quality of American exports.  Proposals for third party inspection, provided that USDA supervision of the inspection and weighing systems remains, and that states who currently do or wish to perform inspections retain their exclusive authority to do so, could benefit American producers.

Free Trade in Agricultural Products

The National Conference of State Legislatures urges the United States Department of Agriculture, the United States Department of Commerce, the United States Department of State, and the United States Trade Representative to take all measures necessary to open foreign markets to bulk and value-added agricultural commodities from the states.  Trade distorting policies must be eliminated so that American farmers may compete fairly in the world marketplace.  The federal government should work to lower these trade barriers, identify specific procedures for quick settlement to border disputes, and encourage international commerce in the area of agriculture.

July 2009

Arts, Culture and Economic Development

            In February 2003, the NCSL Cultural Policy Working Group noted that “as representatives of the public trust, state legislators strive to serve their constituencies well and spend tax dollars wisely.  One way to measure the value of state policies is to examine outcomes relative to inputs or, in other words, ask what results are achieved by providing funding for such activities.  In doing so, policymakers across the country are finding that a relatively modest investment in culture frequently pays big dividends.”

            In that same report, the term “culture” was used to refer, loosely and not exclusively, to four different fields - arts, folklife/heritage, historic preservation, and the humanities.  Beyond the value of culture and the arts in creating more livable communities, studies have demonstrated that communities with thriving cultural scenes attract the highly coveted, and very mobile, knowledge-based worker.  The presence of cultural amenities is an important variable in determining a community's ability to adapt to evolving economic circumstances.  This is particularly important to state policymakers who are striving to improve their state’s economic vitality.

            Arts and culture can influence an array of policy goals, including economic development, rural development, urban revitalization, revenue generation, tourism, accessibility and participation, diversity, education, and youth development.  For many of these areas, states and the federal government are partnered.  Support for the production, distribution, and infrastructure of the arts is critical to success in tourism, attracting business interests, economic development, and quality of life issues.  Further, the arts are a core academic subject in our schools as set forth in the federal “No Child Left Behind” Act, noting that they contribute to student success and workforce development and encouraging commitments to ensure that all students have access to strong and sequential arts education through primary and secondary school.

            NCSL encourages a better and stronger understanding of this partnership as well as a reasoned study and understanding of the inputs and benefits.

Tourism

            Tourism is a vital element of state economic development, diversification, and rural development programs, as well as a leading services sector employer.  As evidence of its importance to the U.S. economy, travel and tourism is the nation's largest export industry, ranks as the nation's third largest employer, and is the third largest retail sales industry.  The Travel Industry Association (TIA) and Smithsonian magazine’s “The Historic/Cultural Traveler, 2003 Edition” report underscores the growing importance of historic and cultural tourists to the tourism industry.  It shows that 118 million adults, or 56% of the U.S. adult population, are considered historic/cultural travelers.  These travelers included at least one of 15 arts, humanities, historic, or heritage activities or events on trips 50 miles or more away from their homes in 2002.  TIA reports that cultural tourism has grown 13% since 1996, which is twice the growth of overall travel.  Cultural/historic tourists claim that a specific event or activity spurs their travel and, in general, spend more money while traveling than the average U.S. tourist.  NCSL encourages Congress and the Administration to open and maintain consultative processes with state governments, and state legislatures in particular, to ensure that state and federal policies and programs encourage the continued vitality of this important sector of the economy.

            The federal government should remain cognizant of the importance of such issues as infrastructure, including airports, air service, highways, signage, electronic information services, national parks and other federally managed lands, historic sites, and other buildings, for the support of domestic and international tourism.  Infrastructure planning and promotion - responsibilities shared by states and the federal government - should incorporate analysis of tourism development needs at all stages.  Further, federal economic development and disaster recovery programs should include tourism among the activities eligible for support.

National Heritage Areas

            The National Park Service defines a National Heritage Area as a place designated by the United States Congress where natural, cultural, historic, and recreational resources combine to form a cohesive, nationally distinctive landscape arising from patterns of human activity shaped by geography.  Communities benefit from this designation through the heritage conservation efforts that are grounded in pride in history and tradition.  Residents, businesses, and governments join together to preserve, promote, and celebrate their heritage, culture, and natural resources for the benefit of current and future generations.  Recognizing these areas as viable drivers for historic preservation and cultural tourism, the National Park Service and the Congress should consult state legislators, as both state policymakers and community leaders, to identify ways of maximizing the National Heritage Area designation to the benefit of their communities and their states.

Collaboration and Coordination

            As with many governmental efforts to influence a complicated policy area such as culture, many institutions and programs are created to address sometimes discrete but often overlapping interests.  The National Endowment for the Arts, the National Endowment for the Humanities, the National Trust for Historic Preservation, the White House Preserve America initiative, offices within USDA Rural Development, the National Park Service, the Smithsonian Institute, the U.S. Department of Education, and many others are engaged in promoting various aspects of culture, the arts, heritage preservation, and tourism.  NCSL encourages ever greater and improved collaboration and coordination among these disparate agencies and budgetary line-items with state legislatures to ensure that the policy and program outcomes meet the needs and goals identified by state policymakers.  Further, this collaboration and coordination should improve the identification and sharing of best practices from and among the states and the federal government.

July 2007

Export Promotion

The United States must promote its exports not only to decrease the trade deficit but also to provide for new jobs and more rapid economic development in our communities.  Both the states and the federal government have a role in export promotion.

States rely on foreign trade and marketing programs to promote exports. In order to assist these state efforts, the federal government must intensify its trade promotion efforts.

Export Controls

America must maintain strong export controls to protect our national security.  But, as the rest of the world catches up to the United States in high-technology fields, we must ensure that our control system protects our security without hurting our economic interests. 

Trade Data

A major responsibility of the federal government is the collection of trade data on U.S. exports and imports.  The federal government should continue to maintain a comprehensive data base of information so that state trade agencies may assist their exporters. 

Export Financing

State legislators play a crucial role in export promotion and export finance.  Legislators are working with government agencies to facilitate the export process for small- and medium-sized businesses.  These businesses often find it extremely difficult to obtain financing from commercial banks.  They also find it difficult to secure federal insurance against the risk of default by a foreign buyer.  To remedy this problem, a number of state legislatures have supported export finance programs. 

The total burden of export financing should not be placed on the states.  States are restricted by size and political realities, so state programs can only supplement, not replace, federal programs.  The federal government must help by providing adequate federal financing.

Although Eximbank has become an important financing mechanism for exporters, it must live within current budgetary restraints.  Therefore, funding for Eximbank's direct, as well as guaranteed loan programs, should be maintained.  Further, NCSL supports a constant level of funding for Eximbank's City/State Program. 

A National Strategy

The National Conference of State Legislatures supports legislation that seeks to develop a national export marketing strategy and greater coordination of and cooperation with state/federal programs in export policy.  NCSL endorses strengthening of current U.S. export programs to address trade imbalances and respond to overseas opportunities to improve our competitive position in the world.

This national strategy should continue to include permanent statutory safe harbors in Federal antitrust law for joint export trade activity, particularly of small- and medium-sized businesses.  The Webb Pomerene Act and the Export Trading Company Act promote exports by enabling U.S. enterprises to coordinate their offshore sales efforts, collectively reaching foreign markets that they might not be able to access individually.  The Acts operate transparently through registration of coordinated efforts with Federal antitrust authorities.  Further, they provide safe harbors for joint sales, marketing and distribution of U.S. goods and services overseas provided there is no restraint of trade within the United States and no adverse effect on firms wishing to export individually.  Clear statutory safe harbors are essential to ensure that this desirable type of cooperative behavior, which is essential in many sectors and broadly significant at a time of record-high U.S. merchandise trade deficits, can continue.

July 2009

Free Trade and Federalism

Gaming and GATS

WHEREAS, regulation of gaming interests ranging from lotteries to horseracing has long been a prerogative of the States;

WHEREAS, state policymakers have chosen vastly different approaches to gaming regulation due to varying public morals, revenue, land-use, and other considerations;

WHEREAS, in the World Trade Organization dispute “Cross-Border Supply of Gaming Services, US v. Antigua,” the WTO Appellate Body ruled that the United States had made a General Agreement on Trade in Services (GATS) commitment covering gambling under “Other Recreational Services”;

WHEREAS, the WTO Dispute Resolution Body stipulated an April 2006 deadline for the United States to comply with the decision in “Cross-Border Supply of Gaming Services,” which includes inter alia amendment of the Interstate Horseracing Act;

WHEREAS, the WTO Dispute Resolution Body found that Antigua did not make sufficient arguments to successfully challenge cited state laws, it did not find state laws immune from future challenge;

WHEREAS, legislation introduced in the 109^th Congress in recent months seeks to strengthen the current ban on wagering over the Internet but thus far has not addressed the implications of the WTO decision and the April 2006 compliance deadline;

WHEREAS, GATS has provisions, at Article XXI, enabling a country to modify or withdraw an existing GATS commitment;

WHEREAS, the scope of the current market-access commitment made by the United States under “Other Recreational Services” in the GATS cannot be reconciled with current carve-outs in federal legislation for interstate horseracing, for Internet sales of state lottery products, or for gambling services offered by Native American tribes;

WHEREAS, the current GATS negotiations provide an opportunity for the United States to withdraw its commitment under “Other Recreational Services,” and offer trading partners the appropriate compensatory trade opportunities in another U.S. service sector;

WHEREAS, European gaming interests have already noted that the US-Antigua case provides them with a “blueprint” for refiling an amended WTO complaint that specifically targets state regulation of gambling; and

WHEREAS, the rapid growth of the internet gambling sector worldwide, coupled with the likelihood of a new WTO complaint on Internet gambling being brought by a major U.S. trading partner, suggests the importance of the immediate withdrawal of the US commitment under “Other Recreational Services;”

NOW, THEREFORE BE IT RESOLVED THAT, the National Conference of State Legislatures (NCSL) calls upon the U.S. Congress to protect American federalism, the role of the states in regulating gaming, and the delicate balance of public morals, commerce, and recreational opportunities that each state has struck as regards gaming by

• instructing USTR to withdraw “other recreational services” by invoking GATS article XXI,
• requiring USTR to effectively, meaningfully, and timely consult with States as compensatory concessions to our trading partners are considered in light of article XXI, and
• obligating USTR to effectively, meaningfully, and timely consult with States as services negotiations under GATS or other agreements progress; and

BE IT FURTHER RESOLVED THAT, a copy of this resolution be sent to the President of the United States and to all the members of Congress.

July 2007

The North American Free Trade Agreement

Presidential Trade Promotion Authority

Responsible Housing

           Adequate and affordable housing is a necessary ingredient for community development, education and workforce development, and economic development.  The need to design and construct affordable housing in America is urgent.  In 2004, an exhibition on Affordable Housing at the National Building Museum informed that twenty-five percent of all American households face severe housing challenges, including insufficient funds for monthly rent or mortgage payments, maintenance, and repairs; overcrowding, both within individual dwellings and in high-density multi-family developments; and structural deficiencies.  These 30 million households include not just the poorest and those without jobs, but also teachers, librarians, firefighters, healthcare workers, and many others who make significant contributions to our communities.  Affordable housing policy that encourages well designed developments can offer new opportunities for the least wealthy Americans while creating real value as assets for communities.
            State legislators support the integration and coordination of public and private resources to make effective, affordable housing services available as means to preventing homelessness, to encouraging self-sufficiency, to promoting economic opportunity, or to promoting homeownership.  NCSL encourages the Congress and the Administration to support flexibility and state discretion in housing programs and to avoid legislatively mandated set-asides in programs such as the HOME Investment Partnerships (HOME) program and the Low-Income Housing Tax Credit.  NCSL encourages efforts to promote a greater state role in administering federal housing programs, subject to sufficient funding and flexibility.

Impediments to Affordable Housing

          For many potential first time homebuyers, the lack of available funds to meet down payment and closing costs is a major impediment to purchasing a home. For others, the lack of sufficient income to make monthly payments on a mortgage at market interest rates and standard loan terms keeps them out of the home buying market.  Also, impacting the ability of hard working Americans to purchase a home is the growing lack of availability of modestly and median priced homes, especially in areas where these Americans work.

Regulatory Impacts

          NCSL is encouraged by the efforts of the Congress to review and reduce regulatory burden at the federal level. We especially request Congress and the Administration to fully review and examine the impact on housing affordability of relevant federal laws and regulations. It is imperative that state and local governments make land use decisions based upon the unique needs of their jurisdiction without interference from the federal government.

Housing Choices

          NCSL recognizes that adequate and affordable housing can take many forms, including apartment dwellings, condominiums, cooperatives, and single-family homes.  As America's population has become more diverse, so too has its housing needs and preferences.  In the last few years, housing has become a priority issue for many communities.  Jurisdictions across the country are struggling with everything from a crisis-level shortage of affordable housing to the traffic and pollution that may accompany suburban sprawl.  This emphasis on housing is a result of the fact that our national housing policy has failed to keep pace with today's market realities, the needs of our communities, and the changing preferences of our population.  Recognizing these many housing options that Americans can enjoy and the varied preferences and needs of American households, federal housing policy must provide ample flexibility that allows state legislators the ability to fully exploit this entire range of possibilities as they craft affordable housing policy to meet the needs of their constituents.
            According to the National Apartment Association (NAA), apartment dwellings are needed and preferred by the 73 million Echo Boomers who are already graduating from college, for the estimated 13 million immigrants who will come to the United States in the next decade, for the millions of hard-working families who are paying more than half of their income for shelter in often substandard housing, and for the 74 million Baby Boomers who are aging and no longer able to care for themselves.  Apartments can also help revitalize neglected neighborhoods and have an immediate, lasting effect on a community’s prosperity.  NAA research indicates that the on-going annual effect of 100 new apartment households in a local economy is 46 local jobs, $308,000 in local taxes and fees, and $1.8 million in local wages and business receipts.  Federal policy must allow states to achieve an appropriate balance between affordable housing needs, land use, and economic development that incorporates all available housing options.
            In addition to traditional site-built homes, manufactured housing is a housing option for many Americans.  According to the Manufactured Housing Institute (MHI), over twenty million Americans live in approximately eight million manufactured homes.  In a report released by the Millennial Housing Commission, during the 1990s, manufactured housing placements accounted for one-quarter of all new housing starts and, from 1997 to 1999, for 72 percent of new units affordable to low-income buyers.  Despite the importance that manufactured housing plays in providing affordable housing for millions, regulatory barriers remain.  NCSL also recognizes the impacts the housing finance system can have on the manufactured housing industry.  NCSL supports efforts to reduce barriers to full utilization of this housing option and supports keeping the mortgage market and secondary mortgage market healthy and thriving for the purchase of manufactured housing.

Distressed Communities, Urban Sprawl, and Smart Growth

Over the course of our nation's young history, we have witnessed major economic and societal realignments.  We have progressed from a mainly rural agricultural economy to one with an industrial base within economic urban centers.  Today, the industrial urban giants have been replaced by suburban power centers tied to an expanding technological economy, the infrastructure of the information superhighway.  As businesses have moved from the inner city core to suburban industrial malls, so have Americans seeking to be close to their jobs. 
            As the inner-cities core spread to the suburban corridors and as businesses and builders develop what may have been once green spaces, the desire by some for either limited or no growth may further impact the availability of affordable homes.  In some of our nation’s newest high tech hubs, many workers must travel more than 100 miles a day because of the lack of affordable housing or reasonable rentals.  Some state and localities have considered smart growth plans to ease the impacts of urban sprawl.  Public policy making with regard to smart growth should recognize the proper balance between curbing urban sprawl on one end and negatively affecting affordable housing on the other end.  For this reason, it is imperative that states and localities make such decisions based on the unique needs of their jurisdiction without interference from the federal government.
            While the National Conference of State Legislatures does not take a position as to whether a state or locality should consider or adopt any smart growth initiatives, NCSL opposes any federal mandate requiring states and/or local communities to adopt such long-term comprehensive plans.  Rather, NCSL calls upon the Congress and the Administration to work with states and our cities in the development and redevelopment of infill sites in many of our older cities and inner suburbs.  Many of these infill sites are brownfields; abandoned industrial sites with some kind of contaminant that could be a barrier to any redevelopment.  To make these brownfields available for housing, Congress needs to give states flexibility to immunize project providers from future federal cleanup liability and provide the necessary funding to assist states in the clean-up of these sites.

Housing Counseling

The National Conference of State Legislatures endorses efforts both by the federal government and the private sector to make the dream of homeownership a reality for more Americans. NCSL is pleased to be a partner with our federal colleagues and the private sector in this endeavor.  NCSL supports programs that help people determine the best housing option for them, promote financial literacy, as well as homeownership preparedness.
            Choosing between varied housing options can involve myriad decisions about everything from finances to credit history to schools to transportation needs.  NCSL applauds efforts by the Congress and the Administration to recognize this dilemma and to respond with housing counseling.  These efforts should respond to a need and not simply become a federal mandate, should build upon and not replace state and local counseling programs, should provide complete flexibility for states to use any federal assistance to improve or establish counseling services, should recognize the variety of housing options available to U.S. residents and not endorse a single option, and should include adequate outreach components to reach those populations in most need of counseling and assistance.  Federal housing counseling efforts should not siphon funds from proven and successful programs and should be separately and adequately funded.

Financing

True to their nature as "laboratories of democracy," the states have developed an array of innovative housing affordability policies. The states are responding to the homeownership problem by issuing mortgage revenue bonds and by establishing housing trust funds to expand homeownership opportunities for moderate-income families. NCSL believes that these efforts will be complimented by proposals in the National Partnership for Homeownership. We are encouraged by such initiatives in the action plan to cut home buying transaction costs, reduce down payment and mortgage carrying costs, and increasing the availability of financing. NCSL is supportive of this public private partnership which includes secondary market entities such as Freddie Mac and Fannie Mae, government and conventional lenders and insurers, and for-profit and not-for profit enterprises as well as trade associations such as the National Association of Home Builders and The National Association of Realtors.
            As many as 23 states are directly engaged in the administration of the Section 8 voucher program.  While NCSL agrees with the Administration that changes, modernizations, and streamlining in the Section 8 program are needed, NCSL has been very concerned by the 2003 Housing Assistance for Needy Families (HANF) and Section 8 funding plans advanced by the Administration.  NCSL encourages the federal government to consult state legislators and other state officials as these program reforms are designed to ensure that they will meet state needs, provide the flexibility we desire, avoid cost shifts to states, and continue with ample federal funding for program and administrative costs.
            NCSL is particularly concerned that FY 2005 proposals for funding Section 8 vouchers use unrealistically low levels of utilization as the basis for future funding.  Given the growing housing affordability gap and the extraordinary demand for this type of housing assistance, we urge the Congress to restore program funding at current levels and address, in consultation with state legislators and other state officials, whatever administrative obstacles or program design features which may preclude its full utilization.  Additionally, we urge the Congress to sustain funding levels sufficient to maintain existing vouchers.
            The HOPE VI program helps bring new life to the most obsolete and distressed public housing developments and provides social services to help low-income residents change their lives.  NCSL encourages the Congress and the Administration to sustain and fund this program.
            NCSL supports the HOME Investment Partnerships program and the Community Development Block Grant (CDBG). The HOME program is a successful and proven model of a state-federal partnership that should be used in other housing and development areas.  HOME was designed as a federal-state-local program, with states receiving a substantial share of the funding, having the flexibility to fit HOME funds into the full range of housing services, including homebuyer education and counseling, and having the authority to spend funds anywhere within a state rather than only in rural areas. Similar to the proposal for the Housing Credit Program, states should have more options to determine median income for purposes of eligibility for HOME funds, such as using the higher of state median income or area median income when calculating rent limitations.  NCSL encourages statutory and regulatory changes that further streamline and simplify HOME so that it is more responsive to state-identified needs.  NCSL also supports effective federal programs and adequate funding to address the affordable housing and community development needs of rural America.
            The Low-Income Housing Tax Credit is a vital tool in producing new, affordable housing.  Any new rental production program should complement the Housing Credit Program.  NCSL supports the Housing Credit Program as well as the creation of a state-administered homeownership tax credit to stimulate the production of homes for low-income families as long as it does not undermine investor interest in the Housing Credit.
            Mortgage Revenue Bonds and Mortgage Credit Certificates are critical to the continued availability of affordable housing.  Any new programs designed to increase homeownership should complement the Mortgage Revenue Bond program.
The effectiveness of Mortgage Revenue Bonds would be improved by repeal of the "10-year rule" established by the Tax and Miscellaneous Revenue Act of 1988.  This requirement harms affordable housing opportunities by requiring that mortgage prepayments occurring ten or more years after the issuance of a Mortgage Revenue Bond be used to repay the bond rather than for new loans to qualified homebuyers.  NCSL supports statutory and regulatory Mortgage Revenue Bond and Housing Credit changes that further streamline and simplify these programs so they are more responsive to state-identified needs.

Department of Housing and Urban Development

The National Conference of State Legislatures is supportive of efforts to revitalize the Department of Housing and Urban Development (HUD) and to reinvent its services delivery.  State legislators are well aware of the promises of federal housing and development assistance for distressed communities within their states, only to see those resources tied up in the bureaucratic maze of HUD headquarters in Washington. 
            While state legislators share some of the same frustrations over HUD's poor performance with those who are working to revitalize our distressed communities, NCSL, however, is concerned that total elimination of the Department could lead to a lessening of the importance of housing as a national priority. NCSL stands ready to work with the Administration and Congress to reinvent HUD into a community development department which would work in partnership with state and local governments and the private sector to provide the tools and flexibility for empowering those Americans within distressed communities to become part of this nation's economic mainstream.
We urge our federal colleagues to help working Americans realize the dream of homeownership by working with the states to ensure housing affordability without onerous federal mandates.

July 2007

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World Trade Organization Negotiations

The National Conference of State Legislatures recognizes the benefits of international trade in creating jobs, raising living standards and stimulating growth in the United States. 

In general, NCSL recognizes and supports U.S. efforts to increase the transparency, accessibility and accountability of the World Trade Organization.  NCSL also supports broadening participation in the WTO and addressing environmental and labor matters.  To achieve these ends, NCSL endorses the call for a new round of trade negotiations within the WTO to further reduce trade barriers in manufactured products, agriculture and services.  NCSL believes that any new round of negotiations within the WTO must be designed to achieve these ends and be fully consistent with NCSL’s policy on Free Trade and Federalism.

In particular, NCSL will not support trade or investment agreements that do not include reservations that limit the unnecessary preemption of state law and that preserve the authority of state legislatures.  Implementing legislation for trade and investment agreements must also be crafted to include protections for our constitutional system of federalism.  Reservations must be made to trade and investment agreements to “grandfather” existing state laws that might otherwise be subject to challenge and so far as possible commit the federal government to protecting state authority when it is exercised in conformity with accepted U.S. constitutional principles of non-discrimination against foreign commerce.  Particular care must be exercised to ensure that state tax laws and revenue systems are not subject to unjustified challenge under international agreements, and they generally should be “carved out” of such agreements. In addition, provisions must be made to deny any private right of action in U.S. courts or before international dispute resolution panels based on international trade or investment agreements.

General Agreement on Trade in Services

            The United States is a signatory to the World Trade Organization’s General Agreement on Trade in Services (GATS).  As GATS attempts to apply trade rules to and regulate tariffs for industries beyond the production and shipment of tangible goods, GATS touches upon many sectors regulated by states and of interest to state legislators.

Services constitute an important and growing segment of the American and the global economies.  NCSL concurs that it is critical that the United States remain competitive in services sectors.  However, international competition in service industries cannot compromise state constitutional or traditional authority or in any way impinge upon states’ ability to protect the public interest.  Services negotiations in particular must incorporate a concerted effort to consult with state legislatures, where policies about government-provided services, regulation of monopolies, provision of essential services (such as energy, water, health, education, or public safety), powers of public utility commissions, or privatization are set.  Consultation with state legislators is absolutely necessary prior to, during, and after negotiations conducted under the General Agreement on Trade in Services (GATS).

NCSL recognizes that sections 2103 and 2106 of the Presidential Trade Promotion Act of 2002 now require that the President notify the Congress as new rounds of GATS negotiations begin and that the Congress approve the results of those negotiations before implementation.  NCSL applauds the Congress for instituting this modification to the GATS process and looks forward to working with USTR and the Congress as negotiations continue.

In particular, NCSL is concerned about GATS negotiations relative to energy and electricity.  Trade rules of GATS apply to more than cross-border trade and cover state regulation of a domestic market, such as electricity where multinational companies have a commercial presence.  GATS negotiations on energy and electricity on services related to transmission, distribution, and access of energy traders to the grid could conflict with state energy policy and alter the balance of domestic authority between states and the Federal Energy Regulatory Commission (FERC).  NCSL has led efforts to create a working group of state and local policymakers, regulators, and other officials to examine and discuss energy and trade policy.  This working group has held mutually beneficial meetings with USTR to promote dialogue and information exchange and has undertaken an exhaustive study of GATS implications for state and local authority over electricity policy.  The working group has published an interim report and NCSL encourages USTR to remain engaged with the working group as it continues to study these issues.

NCSL applauds the consultations that have been undertaken thus far related to renewable energy and electric utility services and encourages USTR to devote substantially the same attention and effort, potentially through similar working groups such as the Intergovernmental Policy Advisory Committee’s services and investor-state working groups, to consultations related to other sectors.

Agreement on Government Procurement

The United States is party to the World Trade Organization’s Agreement on Government Procurement (GPA).  When negotiating the GPA, USTR solicited the state governors for permission to include state procurement and to bind state procurement processes to the GPA.  USTR asserts that 37 states were voluntarily bound through this process to the GPA.  In September 2003, USTR requested state governors to make similar commitments to several free trade agreements (FTAs) being negotiated at the time.  NCSL recognizes that consultation with a limited number of governors is simpler than communicating with 7,500 legislators and that USTR has increasingly made these letters available publicly on the Internet.  Nonetheless, the federal government must work with state legislatures to assure that decisions about state procurement practices are made with their consent.

NCSL is concerned that USTR’s policy of communicating only with governors on procurement issues does not adequately provide for consultation with state legislatures or consider a need to change state law to adjust and obligate state procurement policy.  State procurement policy and practices often are set in state law and are sometimes designed to serve social or economic purposes beyond the mere provision of goods and services for state government use.  NCSL encourages USTR to insure that states can retain the ability to use procurement policy to promote these public interests while negotiating any modifications to GPA or procurement chapters in FTAs.

USTR has indicated to NCSL that there is some movement within the WTO to open and renegotiate sections of the WTO Agreement on Government Procurement (GPA).  Recognizing the value of state purchasing power to international agreements including procurement provisions and the role of state legislatures in setting state procurement policies, NCSL urges USTR to consult regularly and meaningfully with NCSL during any renegotiations.

July 2008

NCSL staff contacts:
Jeremy Meadows, Committee Director
Mandy Rafool, Program Principal

Last Updated August 25, 2006