Capitol to Capitol
An Information Service of NCSL's Standing Committees

Volume 18   Issue 26 - July 18, 2011


States have an extensive menu of health exchange implementation options under regulations proposed in the Federal Register on July 15, 2011. In addition to whether to have the state or federal government operate the exchange, which is already in the law, the proposed regulations allow for different design and certification options along with flexibility to run only a portion of the exchange. Under the law, states have until January 2014 to begin operating their exchanges. With the proposed regulations, states that want to move operations previously under the federal government to the state may be granted later start-up dates with appropriate notification. State legislators and others have until the end of September 2011 to submit comments to the U.S. Department of Health and Human Services. NCSL is preparing a comprehensive summary of the 244-page regulatory proposal that will be available on NCSL’s webpage soon. Go to for the proposed exchange rules. Proposed reinsurance and risk-adjustment regulations are also being issued and can be found at NCSL staff contacts: Joy Johnson Wilson, Rachel Morgan


States and local education agencies could use funds received under the Elementary and Secondary Education Act (ESEA) for additional purposes under H.R. 2445 (Minnesota Rep. John Kline), approved last week by the House Education and Workforce Committees. The legislation is the third in a series of bills aimed at incrementally reauthorizing ESEA. It follows two other committee-passed bills that would eliminate duplicative programs (H.R. 1891) and expand charter schools (H.R. 2218). H.R. 2445 mirrors authority granted in Title VI of ESEA that allows rural school districts to use various ESEA funds for specific purposes. Rep. Kline’s legislation identifies 15 programs for which existing ESEA funding could be used. Future floor action is unlikely until the entire reauthorization package has moved out of committee and Congress has resolved debt ceiling and deficit reduction issues. NCSL staff contacts: Lee Posey, Michael Reed


After several weeks of negotiations between congressional leaders and the White House, the debt ceiling debate now moves to the House and Senate for votes. As a prelude to raising the borrowing limit, the House on Tuesday will vote on H.R. 2560, the Cut, Cap and Balance Act of 2011, with the Senate likely to consider it later in the week. H.R. 2560 would increase the debt ceiling by $2.4 trillion, cut spending for FY 2012, and enact a balanced-budget constitutional amendment that would need to be ratified by states. An NCSL document outlining the history of federal balanced budget measures is available here: Meanwhile, Senate leaders are working on a fallback plan in case a compromise fails to both raise the debt limit and reduce spending. The plan, proposed by Senate Minority Leader Mitch McConnell from Kentucky, would allow President Barack Obama to raise the debt limit in three increments totaling $2.5 trillion while also submitting a corresponding set of savings. State-federal discretionary grant programs are a sure bet for some of the savings. Senate Majority Leader Harry Reid of Nevada is working with Senator McConnell to modify the plan to ensure eventual passage in the House and Senate. NCSL staff contacts: Michael Bird, Jeff Hurley


On July 15, 2011, the Governmental Accounting Standards Board (GASB) released an Exposure Draft intended to dramatically revise how states and localities report and account for their pension plans. The draft would require state and local governments to report unfunded pension liabilities on their balance sheets and create two ways to measure future rate of returns to make projected benefit payments. GASB intends to test their proposed standards for feasibility and implementation costs. States have until Sept. 15, 2011, to comment on the 176-page Exposure Draft, which can be found at The draft comes amidst a federal attempt to enhance the transparency of state and local government pensions, an effort that has quieted recently as federal policymakers focus on deficit reduction/debt ceiling issues. NCSL staff contacts: Michael Bird, Jeff Hurley (DC), Ron Snell (Denver)