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September 26, 2016 - Washington Report

By Leah Wavrunek posted 09-26-2016 04:49 PM

  

This Week on the Hill

The House and Senate are both in session this week, with only five days left to reach an agreement on funding the federal government after Friday.

 

The House is in session today and will consider 16 bills under suspension of the rules, including the Mental Health First Aid Act (H.R. 1877) and the Cyber Preparedness Act (H.R. 5459). For Tuesday and the balance of the week, the House will consider three bills under suspension of the rules in addition to its version of the Water Resources Development Act (H.R. 5303). In committee action this week: the Oversight and Government Reform Committee will hold a hearing Wednesday on cybersecurity and elections; and the Small Business Committee will hold a hearing Tuesday on commercial drone operations and regulations.

 

The Senate is scheduled to take a procedural vote on the legislative vehicle (H.R. 5325) for the continuing resolution (CR) Tuesday at 2:15 pm. Additional information on the fiscal year 2017 budget is included below. The Senate is also expected to hold a vote Wednesday to override the President’s veto on S. 2040, which would allow families of victims of the September 11 terrorist attacks to sue Saudi Arabia. In committee action this week: the Homeland Security and Governmental Affairs Committee will hold a hearing Tuesday on threats to the homeland; and the Judiciary Committee will hold a hearing Wednesday on the refugee resettlement program.

 

Tomorrow the D.C. Circuit Court of Appeals will hear oral arguments in West Virginia v. Environmental Protection Agency. The case will decide whether the EPA violated the law when it finalized its carbon rule to regulate greenhouse gas emissions from the power sector, also known as the Clean Power Plan.

 

Fiscal Year 2017 Budget Update

Five days remain until the end of the federal fiscal year and the first vote on a potential short-term funding bill is scheduled for Tuesday afternoon.

 

Last week the Senate Appropriations Committee released language for a continuing resolution (CR) that would fund the government through December 9. The CR package includes the fiscal year 2017 Military Construction-Veterans Affairs appropriations bill and also provides $1.1 billion in supplemental funding to combat the Zika virus while dropping Zika-related policy riders. The bill also includes $500 million to address flooding disaster needs in Louisiana and other states while providing a higher rate of operations for the Department of Justice and Department of Health and Human Services to begin implementation of the Comprehensive Addiction and Recovery Act (CARA) to address the opioid crisis. The CR provides for the continuation of appropriations at the levels of, and under the terms and conditions of, the fiscal year 2016 acts, but includes a .496 percent across-the-board reduction to those levels in order to stay under the $1.067 trillion discretionary spending cap. A section-by-section analysis can be found here and the legislation can be found here.

 

Senate Democrats have voiced opposition to the bill because it does not include funding to assist Flint, Michigan in recovering from lead contamination. If the Flint money is not added to the House’s version of the Water Resources Development Act, there is a strong chance Senate Democrats will block passage of the CR. The bill also includes a policy rider that halts a campaign finance rule by the Securities and Exchange Commission that could force corporations to disclose campaign spending; Democrats are also opposed to this policy rider.

 

If the Senate is able to pass the procedural vote tomorrow, the window is tightening for approval in the House. Last week that chamber approved the use of same-day authority for a CR, but that authority expires Tuesday. NASBO staff will continue to monitor new developments and will send out updates as warranted.

 

Water Resources Bill on House Floor This Week

The House is scheduled to vote on a $5 billion water resources bill this week, assisting ports, harbors, dams and other waterway projects. The Water Resources Development Act (WRDA), as advanced by the House Transportation and Infrastructure Committee (H.R. 5303), authorizes dozens of new Army Corps of Engineers projects. Unlike the $9.4 billion Senate version (S. 2848) passed on September 15, the House bill does not include $220 million in direct emergency assistance to address the drinking water crisis in Flint, Michigan, requiring a conference committee to reconcile the differences.

 

Administration Releases Guidance for Self-Driving Cars

The Department of Transportation (DOT) and National Highway Traffic Safety Administration (NHTSA) released federal policy guidance last Tuesday on automated vehicles, strongly encouraging states to make the federal DOT the sole regulator of highly autonomous vehicle performance. The policy is divided into four sections: vehicle performance guidance for automated vehicles; model state policy; NHTSA’s currently regulatory tools; and new tools and authorities. Automakers will need to meet 15 performance benchmarks before their autonomous vehicles can take the road and automakers must make vehicle performance assessments public. The model state policy intends to build on collective knowledge to date and help avoid a patchwork of inconsistent laws and regulations; the policy outlines the state roles in regulating autonomous vehicles and lays out model procedures and requirements for state laws. Fact sheets on the policy can be found here. Although most of the policy, while non-binding, is effective immediately upon publication, the department is also seeking formal comment through November 22 (via this publication in the Federal Register), in addition to conducting significant public outreach to seek input on the next approach. According to the guidance, the feedback will inform the next update to the policy, which the department anticipates will be issued within one year. The National Conference of State Legislatures has a list of legislation introduced and enacted related to self-driving vehicles, which can be found here.

 

States Suing Labor Department Over Federal Overtime Rule

Last week 21 states filed a lawsuit in a federal district court in Texas against the U.S. Labor Department over the new overtime rules. The new overtime regulations, which go into effect in December, raise the overtime eligibility threshold for the executive, administrative, or professional employee exemption from $23,660 a year to $47,476 a year, affecting an estimated 4 million workers. The lawsuit details the effects on state budgets as a result of the rule. States joining the lawsuit include Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, South Carolina, Texas, Utah and Wisconsin. Separately, a coalition of business groups also filed a lawsuit against the Labor Department, challenging the constitutionality of the rule. The U.S. Secretary of Labor issued a statement in response to the lawsuits expressing confidence in the legality of the overtime rule.

 

CMS Releases Proposed Rule on State Medicaid Fraud Control Units

The Centers for Medicare and Medicaid Services (CMS) and the Office of Inspector General (OIG) released a proposed rule on State Medicaid Fraud Control Units (MFCU) that would incorporate statutory changes as well as policy and practice changes that have occurred since the regulation was initially issued in 1978. Some of the statutory changes that have occurred include: raising the federal matching rate for ongoing operating costs from 50 percent to 75 percent; establishing a Medicaid state plan requirement that a state must operate an effective MFCU; establishing standards under which Units must operate; and allowing MFCU’s to seek approval from the relevant Inspector General to investigate and prosecute violations of state law related to fraud in any aspect of health care services under any federal health care program if the fraud is primarily related to Medicaid. Comments must be submitted by November 21.

 

Education Department Releases Guidance on English Learners, Evidence-Based Decision-Making

The Department of Education (ED) released non-regulatory guidance to help states, districts and schools provide effective services to improve the English language proficiency and academic achievement of English learners. According to the release, there were more than 4.8 million English learners enrolled in U.S. schools in grades K-12 in the 2014-15 school year. The guidance aims to help states, districts and schools improve educational outcomes for English learners and immigrant children and youth by promoting effective, research-based, educational language instruction programs. The full guidance can be found here. The department also released new guidance to support evidence-based decision-making by states, districts, schools, educators and partners. Also non-regulatory, this guidance is intended to help stakeholders make more effective education investments by leveraging rigorous, relevant evidence to improve outcomes for kids under the Every Student Succeeds Act. The Institute of Education Sciences also launched a redesigned website last week for the What Works Clearinghouse to help educators and policymakers find programs and interventions that evidence shows have had a positive impact on student outcomes.

 

Homeland Security Releases Guidance to States on Election Cybersecurity

The Department of Homeland Security (DHS) recently released a security tip on securing voter registration data, highlighting the types of threats states may face, prevention measures that can be taken, and ideas on responding to unauthorized access to voter registration data. Potential threats can include phishing attempts, denial-of-service attacks, ransomware and server vulnerabilities. Secretary Johnson also released a statement concerning the cybersecurity of election systems, noting DHS stands ready to assist state and local election officials in protecting their systems. As part of this assistance, DHS offers several services including cyber hygiene scans on internet-facing systems, risk and vulnerability assessments, information sharing, and sharing of best practices. The National Association of Secretaries of State (NASS) is also working on the issue of election cybersecurity, releasing a statement on cybersecurity and election readiness and appointing Secretaries of State to the Federal Election Infrastructure Cybersecurity Working Group.

  

 

FCC Issues Notice of Proposed Rulemaking on State Opt-Out Process under FirstNet

The Federal Communications Commission (Commission) plans to issue a Notice of Proposed Rulemaking addressing the Commission’s role in the state opt-out process under FirstNet’s public safety broadband system (the rulemaking information begins on page 17 of the document). FirstNet is responsible for presenting a plan to each Governor detailing the build out of the public safety broadband network in their state; within 90 days after receiving the plan, the Governor must choose whether to participate in FirstNet’s build out or conduct its own deployment of a network. If the state chooses to opt-out, there are several requirements for notification and development of an alternative plan. The Commission’s proposed rule would seek comment on proposed procedures for administering the state opt-out process. Procedures would cover how states would notify the Commission about opting out; criteria used to determine whether states opting out have met the requirements for an alternative plan; what a successful RFP would look like under the opt-out process; what must be included in an alternative plan; and who would have access to a state’s alternative plan. Comments may be submitted for 30 days after publication in the Federal Register.

 

Administration Announces Opioid Week, Attorney General Sends Letter to Governors

The President issued a proclamation declaring September 18 through September 24, 2016 as Prescription Opioid and Heroin Epidemic Awareness Week. Several federal agencies took action leading up to and during the week, including expanded coverage for military members through the TRICARE system, working to combat the supply of fentanyl coming into the country, increasing the patient limit from 100 to 275 for practitioners prescribing buprenorphine to treat opioid disorders, and supporting telemedicine programs that expand access to treatment. The Attorney General issued a memo announcing the department’s prevention, enforcement and treatment strategy and sent a letter to Governors calling on them to strengthen the effectiveness of prescription drug monitoring programs and to improve data sharing from doctors and pharmacists about patient prescriptions. The Department of Justice also announced funding of more than $8.8 million in 20 separate awards to 19 state health and pharmacy boards and departments to enhance prescription drug monitoring programs.

 

 

Recently Released Reports

Weak Stock Market and Declines in Oil Prices Depressed State Tax Revenues, The Rockefeller Institute

 

How States Can Assess the Affordability of Their Debt, The Pew Charitable Trusts

 

2016 Deloitte-NASCIO Cybersecurity Study, National Association of State Chief Information Officers

 

Prepping for the New Session: End-of-Summer Reading for State Budget Analysts, Urban Institute

 

Full-Day Kindergarten: A look across the states, Education Commission of the States

 

 

Economic News 

Federal Reserve Holds Interest Rates Steady for Now

At its September meeting, the Federal Open Market Committee voted 7-3 to maintain the target range for the federal funds rate at .25 to .50 percent. The committee noted information received since the July meeting indicates that the labor market has continued to strengthen and that growth of economic activity has picked up from the modest pace seen in the first half of this year. Although there has been little change in the unemployment rate, job gains have been solid on average. Household spending has been growing strongly but business fixed investment has remained soft; meanwhile inflation has continued to run below the Committee’s 2 percent longer-run objective. Looking at future possible adjustments, the statement says that “the case for an increase in the federal funds rate has strengthened but the Committee has decided, for the time being, to wait for further evidence of continued progress towards its objectives.” The three members who voted for raising the federal funds rate preferred to raise the target range to .50 to .75 percent. Many economists feel an increase is a possibility at the December meeting.

 

Unemployment Rates Stable in 41 States in August

New data from the Bureau of Labor Statistics shows that most regional and state unemployment rates saw little change in August; 41 states and the District of Columbia had stable unemployment rates, 6 states had significantly higher rates and 3 states had lower rates. Compared to one year earlier, 35 states and the District of Columbia had no notable net change, while 5 states had increases and 10 states had notable unemployment rate decreases. The national jobless rate was unchanged from July at 4.9 percent, which is little different from August 2015. Nonfarm payroll employment increased in 4 states and the District of Columbia in August, decreased in 3 states and was essentially unchanged in 43 states. In August, two regions had unemployment rates significantly different from the U.S. rate of 4.9 percent: the Midwest at 4.5 percent and the West at 5.3 percent. Compared to one month earlier, no region had a statistically significant unemployment rate change. However, significant over-the-year rate decreases occurred in two regions: the South (-0.5 percentage point) and West (-0.3 percentage point).