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

Volume 20   Issue 12 - April 5, 2013


In anticipation of expected federal legislation, NCSL joined with nine other state and local government organizations urging the 113th Congress to protect state public pension authority in a letter dated April 3. In the 112th Congress, House and Senate bills were introduced (the Public Employee Pension Transparency Act) to establish federal accounting and funding standards for state and local plans. Those failing to comply would cede their tax-exempt financing authority. NCSL research shows that 44 states have enacted a potpourri of pension reforms since 2009. States are also preparing to address new directives from the Governmental Accounting Standards Board on how to calculate and report liabilities. Moody's is about to launch its own revamped credit rating analysis based on internal market-based calculations. In other words, there is no deficiency of state legislative, regulatory and credit-related action that would prompt a call for federal intervention. As the April 3 letter concludes: “It makes no sense to impose disruptive and costly federal requirements that serve only to interfere with state and local government economic recovery and pension reform efforts.” Updates will follow. The letter is available at NCSL staff contacts: Michael Bird, Jeff Hurley (DC office); Luke Martel, Tamara Rivale (Denver office)


The relationship between federal and state tax systems is inseparably linked, and any federal tax reform will have far-reaching consequences for state and local governments. This was NCSL’s key message in a statement of record submitted to the House Ways and Means Committee for its hearing on tax reform and tax provisions affecting state and local governments on March 19. The hearing was one in a series of congressional briefings analyzing various revenue options for comprehensive federal tax reform. NCSL urged the committee to adhere to several principles, including: 1) maintaining the tax-exempt status of state and local government bonds for infrastructure and capital projects, 2) preserving the fiscal viability and sovereignty of state governments, and 3) protecting the state and local income tax, sales tax and property tax deductions for federal income tax purposes. The full statement can be viewed here: NCSL staff contacts: Michael Bird, Jeff Hurley


The U.S. Environmental Protection Agency has unveiled regulations that propose to require reduced sulfur levels in gasoline and impose fleet-wide pollution limits on new vehicles by 2017. The regulations are additionally designed to curb ozone by up to 80 percent and nitrogen oxides and particulate matter by 70 percent, according to EPA. EPA's cost-benefit analysis shows $10 billion in refinery upgrade costs plus a little more than $2 billion in annual operating increases matched against annual health benefits of up to $23 billion. The administration announcement has triggered statements of both support and opposition, as well as calls for regulatory delays. The proposed rule and an overview from EPA is available here: NCSL staff contacts: Tamra Spielvogel, Melanie Condon


In late March, the Congressional Budget Office (CBO) released its yearly report detailing intergovernmental and private sector mandates between 2012 until the close of the 112th Congress in early 2013. The Unfunded Mandates Reform Act (UMRA), which was adopted in 1995 in an effort “to curb the practice of imposing unfunded federal mandates on state and local governments,” requires CBO to assess the cost of mandates. The act defines a mandate as any provision that would impose an enforceable duty on state, local or tribal governments or the private sector, or that would reduce or eliminate the amount of funding authorized to cover the costs of existing mandates. In 2012, after adjusting for inflation, the statutory threshold for intergovernmental mandates was $73 million. CBO claims that of the 428 bills it reviewed in 2012, 68 contained intergovernmental mandates, but only two bills included mandates that met this threshold. These bills, neither of which were enacted, were the Digital Goods and Services Tax Fairness Act and the Postal Reform Act of 2011. CBO’s report can be viewed here: NCSL staff contacts: Michael Bird, Jeff Hurley