“Can an unsecured creditor be better off when the debtor defaults rather than paying off the debt? Yes: Law can be stranger than fiction in the Preference Zone.”—Ninth Circuit
While Washington, D.C. license plates have included the phrase “taxation without representation” since 2000—updated in 2016 to “end taxation without representation”—battling COVID-19 has renewed the call for D.C. statehood.
Although typically funded as if it were a state, in the $2 trillion federal Coronavirus Aid, Relief, and Economic Security (CARES) Act (Public Law 116-136) enacted in March, D.C. was classified as a “territory.” Despite a population surpassing Wyoming and Vermont, D.C. received roughly $500 million in federal relief funds compared to the $1.25 billion minimum states collected.
D.C. officials and community leaders are urging Congress to restore the shortfall. The Democrats’ coronavirus stimulus proposal, H.R. 6800, would provide an additional $500 billion to the Treasury Department to distribute to state governments. This time, the proposed allocation would include D.C., and D.C. would also receive an additional $755 million.
Further, on June 24, 2020, the House of Representatives passed the Washington, D.C. Admission Act (H.R. 51) with a vote of 232 to 180, which would officially admit D.C. into the Union. Although, as presently constituted, the Senate is unlikely to pass similar legislation.
While D.C.’s lack of voting Congressional representation enjoys renewed national attention, Congress’ control over local legislation—and how the city works with it—is hidden in plain sight. With state leadership largely responsible for responding to COVID-19, D.C.’s “home rule” government has been put to the test. “Emergency” legislation, which escapes a lengthy Congressional review, and “temporary” legislation have been essential to the health and welfare of its citizens and businesses.
Founding the District of Columbia
After Pennsylvania refused to protect the Confederation Congress from several hundred disgruntled soldiers during the Pennsylvania Mutiny of 1783, James Madison wrote in The Federalist No. 43 of the “indispensable necessity” for a federal district subject to the “compleat authority” of Congress.
Article 1, Section 8, Clause 17 of the United States Constitution provided the authority to create “such District”—the federal district Madison envisioned—that would “become the Seat of the Government of the United States” with Congress exercising “exclusive Legislation.” On July 16, 1790, the Residence Act of 1790 established the District of Columbia as the permanent Federal capital of the nation. Following the surveying of precise boundaries, and the federal government’s official move from Philadelphia in 1800, the City of Washington, D.C., was incorporated by an act of May 3, 1802, 2 Stat. 195, effective June 1, 1802.
The District of Columbia Home Rule Act
On Christmas Eve of 1973, 171 years later, Congress approved the District of Columbia Home Rule Act (D.C. Code §§ 1-201.01 et seq., Public Law 93-198, 87 Stat. 774 et seq. (December 24, 1973)), which granted “certain legislative powers to the government of the District of Columbia,” including the power to elect local officials and to set up a local government. With passage of the Home Rule Act, Congress sought “to the greatest extent possible, consistent with the constitutional mandate,” to free itself “of the burden of legislating upon essentially local District matters” (D.C. Code § 1-201.02).
In the Fall of 1974, citizens of D.C. promptly elected a Mayor and a Council of the District of Columbia. The Council holds the legislative power of the District of Columbia, subject to Congressional review (D.C. Code § 1-204.04(a)). After the Council passes an act, the Mayor has 10 business days to disapprove and inaction is deemed approval (D.C. Code § 1-204.04(e)).
However, despite Home Rule, Congress retains its constitutional grant of “ultimate legislative authority” and must review all legislation passed by the Council before it can become law. That is, except emergency legislation discussed below. After the Council approves an act, it must be sent to Congress for 30 legislative days (with some exceptions), during which Congress may enact a joint resolution to disapprove it. If the President approves the joint resolution, the Council’s act is stopped from becoming law. Only if no joint resolution passes and is approved by the President within the congressional review period does a D.C. act become law (D.C. Code § 1-206.02(c)(1)). Exceptions to the 30 legislative day review process include a 60 legislative day period for criminal legislation, and the D.C. budget, which runs through the President’s overall federal budget, with D.C. defined as if it were a federal agency (31 U.S.C. § 1101).
(See here for more information on how an act becomes a law in D.C.)
Legislative Expedients: Emergency and Temporary Legislation
Despite its constitutional-strength grip on D.C. legislation, Congress also provided avenues for D.C. to bypass the lengthy congressional review period. The Council may enact “emergency” legislation by a two-thirds vote after one reading by the Council, instead of the regular two, and the emergency legislation will be effective immediately and remain in effect for 90 days (D.C. Code § 1.204.12(a)).
As 90 days is rarely enough time to address a civic issue, by rule of the Council, the Council may also simultaneously introduce “temporary” legislation, at the same time emergency legislation is introduced (D.C. Council Rule 413). Like emergency legislation, temporary legislation may also skip D.C. committee assignment and the Committee of the Whole. However, unlike emergency legislation, temporary legislation requires a second reading, review by the Mayor, and the congressional review period. The extra procedural steps allow temporary legislation to remain in effect for up to 225 days.
Emergency Legislation During a Public Health Emergency
Despite its title, emergency legislation is employed with relative frequency by the Council. According to the Legislative Information Management System, in the last two council periods, emergency bills constituted approximately 33 and 43 percent of the total bills introduced.
Yet, COVID-19’s rapid evolution has tested D.C.’s system of Home Rule in the context of a factual emergency. Unable to wait for congressional review, D.C. has relied on emergency and temporary legislation to support residents and businesses for the last six months. Since March 11, with Act 23-247, the Council has enacted 20 emergency and two temporary acts related to COVID-19.
For example, On July 27, Mayor Muriel Bowser signed the District of Columbia Business Support Grants Emergency Amendment Act of 2020 (D.C. Act 23-347), which authorizes up to $100 million from the CARES Act to provide support grants to eligible businesses. As characterized in the title, the Act is emergency legislation. The District of Columbia Business Support Grants Temporary Amendment Act of 2020 (D.C. Bill 23-0832) was simultaneously introduced and awaits congressional review.
As the fall sees the contemplation of additional stimulus funding, an election, and the continued challenge of responding to COVID-19, it is important for businesses to not only monitor D.C. legislation, but to understand the self-proclaimed “unique” legislative process behind it.
Pillsbury is closely monitoring and analyzing the global legal, economic, policy and industry impacts of COVID-19. For our latest insights, visit our COVID-19 and Economic Impact Resource Center.