Capitol to Capitol is NCSL's state-federal newsletter.
“The legal system should find an appropriate case for this Court to re-examine Quill and Bellas Hess.”
- Justice Anthony Kennedy, March 3, 2015, DMA v. Brohl.
On this day in 1635, Roger Williams, founder of Rhode Island, was banished from the Massachusetts Bay Colony as a religious dissident after he spoke out against punishments for religious offenses and giving away Native American land. In addition to founding Rhode Island, the Puritan minister is remembered for advocating for a principle that remains contentious to this day—separation of church and state.
On Oct. 2, South Dakota Attorney General Marty Jackley announced the state had formally petitioned the U.S. Supreme Court (SCOTUS) asking the for the authority to enforce its 2016 remote sales tax law, S.B. 106. Authored by current NCSL President Senator Deb Peters (R-S.D.), S.B. 106 requires out-of-state retailers that annually have (1) in-state sales exceeding $100,000, or (2) 200 or more separate in-state transactions, to collect and remit the state's sales tax. Given that states are constitutionally barred from requiring out-of-state businesses to collect and remit sales tax under the 1992 Supreme Court decision Quill Corp. v. North Dakota, the South Dakota law was clearly intended to take a case to SCOTUS and successfully convince the court to overturn the Quill decision. By January 2018, if not before, Peters, Jackley and South Dakota will find out if the court will grant them that opportunity.
The State and Local Legal Center (SLLC), which files amicus curiae briefs in support of state and local governments in the Supreme Court, will be filing an amicus brief on behalf of the “Big 7” state and local government groups, including NCSL, and will ask the court to grant South Dakota’s petition. Along with the SLLC, briefs for the South Dakota case, which are due by Nov. 2, are expected from the Streamlined Sales Tax Governing Board, tax academics, retail associations and a group of state attorneys general. (Please contact your state’s attorney general regarding whether or not your state plans to join the attorneys general brief.)
NCSL Contacts: Max Behlke, Jake Lestock
An “insular area” of the United States is an area that is neither a part of one of the 50 U.S. states nor the U.S. federal district of Washington, D.C. The word "insular" comes from the Latin word insula ("island") because they were once administered by the War Department's Bureau of Insular Affairs, now the Office of Insular Affairs at the Department of the Interior. Congress has extended citizenship rights by birth to all inhabited territories except American Samoa, whose citizens are U.S. nationals by place of birth, or are U.S. citizens by parentage. The people of American Samoa may vote and run for office in any U.S. jurisdiction in which they are residents, and they become naturalized U.S. citizens after residing in a state for three months.
On Oct. 5, the House of Representatives passed a budget resolution and the Senate Budget Committee passed a competing budget plan, setting the stage for a contentious conference committee in several weeks. Assuming both chambers can ultimately agree upon and pass a budget, it is unlikely that most of the spending outlays and policy goals included in the House budget resolution will actually materialize in an appropriations package able to pass both chambers. However, passage of a budget resolution will be vital for tax reform, as it will both outline the fiscal parameters of a tax bill and allow tax reform to pass through budget reconciliation, thus negating the Senate’s filibuster rules.
House Budget Resolution
After months of intra-party debate, House Republicans secured the necessary votes to pass their fiscal year 2018 resolution, H. Con. Res. 71, on a 219-206 vote. Eighteen Republicans joined Democrats in voting against the measure, with rumors that several Republicans who joined were specifically taking a stand against the GOP’s plans to eliminate the state and local tax deduction. While conservative and moderate Republicans alike voiced their concerns with the budget package, they shelved their objections to advance their collective interest in enacting tax reform later this year. In general, the budget resolution reduces spending over 10 years and directs lawmakers to find at least $203 billion in extra savings from entitlement programs, such as food stamps, agricultural subsidies and housing assistance. However, the budget increases defense spending by proposing a Pentagon budget of $620 billion, which was a compromise figure between the $640 billion desired by defense hawks and the $603 billion request from the White House. Finally, among other provisions, the budget proposal includes provisions that would allow for: the repeal and/or replacement of the Affordable Care Act, the commercialization of air traffic control, investments in national infrastructure, and the extension of the State Children’s Health Insurance Program (CHIP).
House Republicans have already acknowledged that their budget resolution will likely differ drastically from the Senate budget plan and understand that the differences will need to be reconciled in conference.
Senate Budget Resolution
Last Thursday evening, the Senate Budget Committee also passed its version of a budget resolution along a party-line vote of 12-11 after an all-day markup. As was the case in the House, the primary purpose of the Senate proposal is to pave the way for tax reform. To do so, the Senate Committee’s budget would give legislators the leeway to add $1.5 trillion to the deficit over a decade to allow for an overhaul of the tax code. The plan reduces spending for domestic departments including agriculture, transportation and energy, while creating a record 10-year $695 billion budget for the Pentagon. One of the largest cuts would hit the nation’s transportation programs, reducing funding $11.29 billion over 10 years, while the department’s mandatory funding would be reduced even further, from $55.4 billion to $37.6 billion during that same period. Besides defense spending, the biggest spending increases target health programs with ballooning costs like Medicare. A more contentious issue that was unveiled during the markup was when the panel rejected an amendment in a party-line vote to strike instructions in the budget to allow Congress to find $473 billion in savings from Medicare over a decade. Democrats say that this amounts to cuts in Medicare, while Republicans argue it would simply allow Congress to slow the program’s rate of growth. While there are similarities between the two plans, the slim majority of Republicans in the Senate will force concessions and you can bet that this Senate plan will more likely resemble the final compromise package.
The full Senate is currently planning to vote on the Senate Budget Committee’s budget resolution the week of Oct. 16. Assuming it passes, House and Senate negotiators will form a conference committee to develop a final compromise plan, but that process will probably not begin until November. Both chambers will then need to pass the conference committee budget resolution, which is by no means guaranteed, before they can begin the budget reconciliation process, which will serve as the vehicle for tax reform.
During the 1800 presidential campaign, one of the nastiest elections in American history, Democratic-Republican Vice President Thomas Jefferson secretly hired a writer named James Callender to attack his opponent, Federalist incumbent President John Adams, in print. Callender called Adams a “hermaphroditical character” who neither had the “force of a man” or the “gentleness of a woman.” Callender was later jailed for nine months for insurrection under the Alien and Sedition Acts, which gave the Democratic-Republicans a convenient martyr.
This week, the House is expected to vote on its second disaster package in the past five weeks. The package is expected to reflect last week’s request from the White House, which sought $12.8 billion to replenish Federal Emergency Management Agency’s (FEMA) disaster fund and another $16 billion to reduce debt in the National Flood Insurance Program. The Senate would take up the aid bill immediately after returning on Oct. 16 from its recess.
If Congress chooses to craft their legislation in accord with the White House’s request, legislators from states still recovering from the recent storms may complain that the relief measure is too small. For instance, the Texas congressional delegation and the state’s governor, Greg Abbott, sent a letter last week to Congress asking for appropriators to broaden the scope of its aid package, given that Abbott has estimated that the recovery could cost his state up to $180 billion. In another letter to Congress obtained by CNN, Puerto Rico Governor Ricardo Rosselló, wrote that the Hurricane Maria’s devastation of the island is an "unprecedented catastrophe," and that he is seeking a significant new influx of money in the near term as the island sits on the brink of "a massive liquidity crisis."
However, representatives from the hardest hit states, including Florida and Texas, as well as the territories of Puerto Rico and the U.S. Virgin Islands, should not get their hopes up for financial assistance that is non-FEMA or non-flood insurance related, at least not now. Florida U.S. Representative Mario Diaz-Balart, a GOP appropriator, explained that more financial aid will certainly be needed for the community block grants program, but it will have to wait until another legislative vehicle. Another member of the Appropriations Committee, Representative Hal Rogers (R-Ky.), said, “We're just now getting into disaster recovery" and that we will discuss other programs in the future.
Last week, the NCSL Human Services team hosted 28 legislators, all chairs of human services or related committees, from 22 states, in Nashville, Tenn. The meeting helped legislators bolster their policy expertise in anti-poverty strategies, multi-generational approaches to meet the needs of children and parents, early learning strategies by leveraging recent changes in federal Every Student Succeeds Act (ESSA) legislation, child care re-authorization, and new ways to support foster parents and caseworkers.
Legislators had the opportunity to hear from a variety of speakers and they also spoke with representatives from the federal government. Shannon Christian and Mary Sprague from the Department of Health and Human Services’ Office of Child Care spoke about a recent Child Care and Development Block Grant (CCDBG) Reauthorization Implementation focusing on background check requirements, and Clarence Carter from the Office of Family Assistance spoke about future priorities for children and families participating in the Temporary Assistance for Needy Families program.
Access the meeting resources.
NCSL Contact: Haley Nicholson
Why does this matter? – As a lame duck, Corker does not have to worry about re-election, so he is, in essence, able to speak and act as he pleases. Given that Republicans have a slim 52-48 majority in the Senate, Corker’s vote will be vital to pass key tenets of the GOP agenda, including tax reform. And as Corker has already expressed reservations about voting for a tax plan that would add to the deficit, his feud with the president could further entrench that position, which could ultimately doom a legislative package to rewrite the tax code.
Read the Oct. 2 Capitol-to-Capitol.
If you have comments or suggestions regarding Capitol-to-Capitol, please contact Max Behlke.
NCSL's Washington staff advocate Congress, the White House, and federal agencies on behalf of state legislatures in accord with the policy directives and resolutions that are recommended by the NCSL Standing Committees and adopted by the full conference at the annual NCSL Legislative Summit Business Meeting. As a result of the advocacy that is guided by these policies positions, NCSL is recognized as a formidable lobbying force in state-federal relations.