An Information Service of NCSL's Standing Committees
Volume 19 Issue 25 - July 31, 2012
MORE PROGRESS ON STREAMLINED “
The new economy or if you prefer, electronic commerce, which is not bound by state and local borders, makes it critical to simplify the collection of state and local taxes to ensure a level playing field for all sellers, to enhance economic development, and to avoid discrimination based upon how a sale may be transacted.” NCSL sent that message to members of the U.S. House Judiciary Committee in a bipartisan statement from Illinois Senator Pam Althoff, Maryland Delegate Sheila Hixson and Utah Senator Curt Bramble on July 24. The Judiciary Committee also heard favorable testimony from Utah Representative Wayne Harper, the soon-to-be-president of the board governing efforts to establish a streamlined sales and use tax collection system. The committee’s hearing on the “Marketplace Equity Act of 2011” (H.R. 3179), is yet another positive step toward making streamlined sales tax collection a reality. This week, the Senate Commerce Committee hears testimony on S. 1832, the Senate’s version of H.R. 3179, in what has become a drum beat paving the way for ultimate enactment of this legislation. State legislators should contact their House members and urge them to co-sponsor H.R. 3179 (the legislation currently has 48 co-sponsors) and U.S. Senators to co-sponsor S. 1832 (the legislation currently has 19 co-sponsors). Stay tuned, this issue is gaining momentum. The NCSL statement and Representative Harper’s testimony are available at: http://www.ncsl.org/issues-research/telecom/ncsl-letter-on-the-digital-goods-and-services-tax.aspx, http://judiciary.house.gov/hearings/Hearings%202012/Harper%2007242012.pdf. NCSL staff contacts: Neal Osten, Max Behlke
UMRA REFORM PASSES HOUSE
Legislation requiring more transparency with unfunded federal mandates imposed on state and local governments passed the House last Thursday on a 245-172 vote. The Red Tape Reduction and Small Business Job Creation Act (H.R. 4078) would strengthen the Unfunded Mandates Reform Act (UMRA) by adding an estimate of indirect costs to the current fiscal analysis requirements. H.R. 4078 includes numerous regulatory changes for the private sector, which will likely derail any likelihood of a counterpart passing in the Senate. The passage of H.R. 4078 renews momentum, however, to “curb the practice of imposing unfunded federal mandates on state and local governments,” which was the goal of UMRA when it became law in 1995. This now provides an opportunity to extract the state and local government provisions from H.R. 4078 and move them separately in the Senate. NCSL staff contacts: Michael Bird, Jeff Hurley
HEALTH CARE HELP UNVEILED
Helpful new resources are available from the U.S. Department of Health and Human Services (HHS) to clarify their interpretation of the U.S. Supreme Court's decision in the case of the National Federation of Independent Business (NFIB) v. Sebelius, Secretary of Health and Human Services. In a letter to governors July 10, HHS Secretary Kathleen Sebelius expressed the administration's commitment to giving states as much flexibility as possible in implementing exchange and Medicaid provisions in the Affordable Care Act (ACA). Specifically addressing the Medicaid expansion, Sebelius noted that the enhanced match for new-eligibles and flexibility in designing benefit packages would still be available to states, as well as the exchange establishment grants if applied for by the end of 2014. In a second letter July 13, Marilyn Tavenner, HHS' acting administrator of the Center for Medicare and Medicaid Services, responded to an enquiry by the Republican Governors Association (RGA) for additional guidance on the court opinion. Tavenner said that no deadlines had been placed on states to make any decisions about their Medicaid programs. She added that nonrefundable financing would be available for Medicaid IT and other expenditures associated with establishing the exchanges, if applied for by the end of 2014.
On July 24, the Congressional Budget Office (CBO) came out with new projections reflecting the changes brought about by the court ruling. The report estimated costs associated with ACA implementation would fall $84 billion below their original estimate. On July 16, the Congressional Research Service (CRS) published a comprehensive analysis of the Medicaid expansion options open to states. Finally, HHS is holding four regional forums where they will discuss many of the issues in the next steps of implementing health reform. The schedule for these meetings is as follows: August 14 (Washington D.C.); August 15 (Atlanta, GA); August 21 (Chicago, IL); and August 22 (Denver, CO). Space will be limited, so anyone planning to attend should register as soon as possible. All of the resources mentioned here, and additional information on the court ruling are available from the NCSL website at
http://www.ncsl.org/issues-research/health/us-supreme-court-and-the-federal-health-law.aspx. NCSL staff contacts: Joy Wilson, Rachel Morgan
FISCAL “PRECIPICE” COMES INTO FOCUS
Although it’s still far from clear after last week’s actions, states have a better picture of where federal policymakers are headed on myriad fiscal issues. The president’s signature awaits after both houses overwhelmingly passed H.R. 5872, requiring the president to provide within 30 days a comprehensive analysis of sequestration’s potential affect on both domestic discretionary and defense programs. This will likely ensure any future deal to substitute another deficit reduction mechanism for sequestration. Also, the U.S. Department of Education estimated that sequestration would reduce Title I, Individuals with Disabilities Education Act and Vocational Education funding for states by 8.4 percent, but not until the 2013-2014 school year.
On the tax front, the Senate passed S. 3412, a one-year extension of some of the previous tax cuts for individual taxpayers with incomes up to $200,000 for individuals and $250,000 for couples on a 51-48 vote. This week, the House will likely pass H.R. 8, a one-year extension of all the existing tax reductions, regardless of income. It will also likely pass H.R. 6169, establishing an expedited process for moving federal tax reform next year and laying out priorities that include lower marginal income tax rates (individual and corporate), alternative minimum tax repeal, unspecified tax expenditure elimination and less complexity.
The House and Senate’s actions will establish starting points for making decisions after the election as well as next session. Calls for a six-month continuing resolution and partial abandonment of the FY 2013 appropriations process have increased. This proposal makes for easier discussions—if bipartisanship can be found on the overall discretionary spending cap. That means pitting the lower number House Budget Resolution against the Budget Control Act, a difference of $19 billion for FY 2013. Stay tuned. Congress has one week to clarify all this before leaving for a six-week recess. NCSL staff contacts: Michael Bird, Jeff Hurley