Capitol to Capitol | June 3, 2024 - National Conference of State Legislatures

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NCSL Updates

NCSL Report: Funding for Child Care and Early Childhood Education

This new NCSL report examines the patchwork of federal funding streams that support child care and early childhood programs. The report distinguishes between funding streams that exclusively support child care programs and those with child care as an allowable use. It includes a summary of high-level requirements and the state role, if any, in each program. There is also a short section describing tax credits that can help with child care access and costs. Read more

Congressional Updates

Senate Bipartisan Working Group Releases AI Road Map

The road map does not create legislation. Instead, it highlights bipartisan policy priorities and encourages individual Senate committees to develop and consider legislation in several overarching areas throughout 2024 and beyond. The Senate bipartisan Artificial Intelligence Working Group, formed in May 2023, includes Sens. Chuck Schumer (D-N.Y.), Todd Young (R-Ind.), Martin Heinrich (D-N.M.) and Michael Rounds (R-S.D.).

The road map is divided into nine sections and follows the nine bipartisan Artificial Intelligence Insight Forums the working group held with stakeholders in the fall of 2023. The following is a summary of some of the road map’s policy recommendations, excluding the first section, which contained an overview:

Supporting Innovation

Appropriate $32 billion a year for nondefense AI innovation as recommended by the National Security Commission on AI.
Pass and fund the CREATE AI Act (S 2714) to authorize the National Artificial Intelligence Research Resource, a pilot program out of the National Science Foundation, to connect U.S. researchers to the computational, data, software, model and training resources they need to participate in AI research.
Focus on startups to compete in the AI marketplace, including legislation to support the dissemination of best practices to incentivize states and localities to invest in similar opportunities as provided by the NAIRR.

AI and the Workforce

Develop legislation related to training, retraining and upskilling the private sector workforce to successfully participate in an AI-enabled economy.
Consider the impact of AI on the long-term future of work.
Consider legislation to improve the U.S. immigration system for high-skilled STEM workers.
Consider the Workforce Data for Analyzing and Tracking Automation Act (S 2138), which would authorize the Bureau of Labor Statistics to record the effect of automation on the workforce and measure those trends over time, including job displacement, the number of new jobs created and shifts in high-demand skills.

High-Impact Uses of AI

Ensure that AI use cases do not directly or inadvertently infringe on constitutional rights, imperil public safety or violate existing antidiscrimination laws.
Encourage Senate committees to explore how AI may affect some parts of our population differently, both positively and negatively.
Develop AI legislation related to critical infrastructure, financial services and housing; to address online child sexual abuse material; to protect children from potential AI-powered harms online; to deter the use of fraud; for testing and deployment of autonomous vehicles; and for use in health care with measures to protect patients.

Elections and Democracy

Encourage Senate committees and AI developers and deployers to advance effective watermarking and digital content provenance as it relates to AI-generated or AI-augmented election content.

Privacy and Liability

Consider whether there is a need for additional standards, or clarity around existing standards, to hold AI developers and deployers accountable if their products or actions cause harm to consumers, or to hold end users accountable if their actions cause harm, as well as how to enforce any liability standards.
Support strong comprehensive federal data privacy law to protect personal information.

Transparency, Explainability, Intellectual Property and Copyright

Consider legislation to establish an approach to public-facing transparency requirements for AI systems, including best practices for when deployers should disclose that their products use AI (e.g., data training sets, software products or use of likeness, name and voice).
Consider legislation aimed at establishing a public awareness and education campaign to provide information regarding the benefits, risks and prevalence of AI in the lives of individuals in the U.S.

Safeguarding Against Artificial Intelligence Risks

Encourage relevant committees to consider a resilient risk regime focusing on the capabilities of AI systems, protecting proprietary information and allowing for continued innovation in the U.S.
Develop a framework that specifies what circumstances would warrant a requirement of predeployment evaluation of AI models.
Develop legislation aimed at advancing research and development efforts that address risks posed by various AI system capabilities, including by equipping developers, deployers and users with the knowledge and tools necessary to identify, assess and effectively manage those risks.

National Security

Committees and executive branch agencies should collaborate to stay informed about the research areas and capabilities of U.S. adversaries.
Develop career pathways and training programs for digital engineering and resources for a strong digital workforce within the armed services.
Relevant committees, in collaboration with the private sector, should continue to address and mitigate the rising energy demand of AI systems to ensure the U.S. can remain competitive and keep energy costs down.

Read the road map here.

House Begins Appropriations Markups

Chairs of the House Appropriations subcommittees kicked off markups for fiscal year 2025 spending bills last week. Markups were held for two bills, Military Construction and Veteran Affairs and Legislative Branch, with additional markups scheduled for after the Memorial Day recess starting June 4. Markups that week will include State and Foreign Operations, Homeland Security, Defense and Financial Services. The markups schedule pauses over Independence Day and concludes on July 10. House Appropriations Chair Tom Cole (R-Okla.) has released a discretionary spending topline of $1.6 trillion and subsequent subcommittee allocations for all 12 bills.

The Senate Appropriations Committee finished its budget hearings last week and is expected to begin markups of the spending bills in June.

Read more:
House Subcommittee Allocations (302b) | Majority Press Release
House Appropriations | Markup Schedule
Senate Appropriations | Hearing Schedule

CBO Scores Potential Extension of the Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act of 2017 largely covered the 2018-25 tax years. With many provisions expiring at the end of the 2025 calendar year, lawmakers are likely to consider a comprehensive tax bill in the new Congress next year. The Congressional Budget Office recently estimated a cost of $4.6 trillion to extend the act for 2025-34. Notable expiring provisions include:

Major elements of the individual income tax code.
The cap on the SALT deduction.
Statutory tax rates and brackets.
Changes to the basic standard deduction.
The size and refundability of the child tax credit.
Changes for pass-through business income—199A deduction.
The income levels at which the alternative minimum tax takes effect.

SNAP: House Committee Giveth and Taketh in Farm Bill 2024

After a 13-hour, mostly contentious hearing, the House Committee on Agriculture approved its version of the 2024 farm bill with a change to SNAP funding that is estimated to result in a $30 billion reduction in benefits over the next decade. Every state would be impacted. The change results from a provision in the bill that prohibits all but inflationary increases to the Thrifty Food Plan (used to establish SNAP benefits)—a provision that rolls back authority granted to the USDA in the 2018 farm bill to undertake a reevaluation of the plan every five years that accounts for changes in dietary guidance and food consumption patterns in addition to inflation. Beyond limiting increases to inflation, the measure also freezes the list of allowable products for purchase with SNAP benefits and the amount allocated for their purchase. A USDA reevaluation in 2021 resulted in a significant increase in the cost of SNAP benefits—the first such increase in 50 years. For SNAP recipients, this translated into a $1.40 increase per person, per day (from $4.80/pp/pd to $6.20).

Committee Chair Glenn Thompson has indicated that some of the resulting savings from the rollback would instead be used to pay for other priorities both within and outside of the nutrition title, including expanded eligibility for SNAP benefits to people with felony drug convictions, registration for SNAP benefits to people due to be released from prison within 30 days, simplification of the application process for the elderly, and guidance to states on notifying students in higher education work study programs of their SNAP eligibility. Billions of these dollars would also be allocated as subsidies to farmers of peanuts, cotton and rice to mitigate rising fuel and fertilizer costs.

The 2018 farm bill was due to be authorized last year but the lack of bipartisan agreement led to a one-year extension ending Sept. 30, 2024. Whether a similar fate awaits the bill this year remains to be seen considering its uncertain future on the House floor and Senate Agriculture Committee Chair Debbie Stabenow’s (D-Mich.) doubts about its ability to pass the Senate.

NCSL will be closely monitoring the House bill and the release of the Senate draft.

Additional resources:
2024 House committee farm bill, click here.
2024 House committee farm bill title-by-title summary, click here.
2024 Senate committee farm bill summary, click here.
2024 Senate committee farm bill section-by-section summary, click here.
2024 Senate committee farm bill nutrition title summary, click here.

Administration Updates

Education Department Forgives $7.7B in Student Loans

Nearly 160,000 borrowers received forgiveness through the Public Service Loan Forgiveness and income-driven repayment programs. The administration has forgiven over $167 billion across all loan forgiveness programs. Read more

Consumer Financial Protection Bureau Confirms ‘Buy Now, Pay Later’ Lenders Are Credit Card Providers

The “buy now, pay later” transaction, once referred to as layaway, is a way to help consumers pay for expensive products and services over time without paying interest. According to the Consumer Financial Protection Bureau’s interpretive rule, “buy now, pay later” lenders are like credit card providers and must offer consumers some key legal protections and rights that apply to conventional credit cards. These include a right to dispute charges and receive a refund from the lender after returning a product purchased with a pay-later loan. Comments on the rule are due Aug. 1. Read more

FAFSA Update: Completion Gap Closing

The Department of Education announced that it has processed more than 10 million Free Application for Federal Student Aid forms. Completion rates are now down 12% compared with the last cycle after being down nearly 40% two months ago, the department reports. Read more

Court Update

Supreme Court Holds CFPB Funding Constitutional

In an opinion by Justice Clarence Thomas, the court ruled 7-2 that the statute funding the Consumer Financial Protection Bureau through the Federal Reserve instead of congressional appropriations satisfies the U.S. Constitution’s appropriations clause. The court reasoned in CFPB v. Community Financial Services Association that appropriations need only identify the source of public funds and authorize their expenditure for a designated purpose to pass constitutional muster. In this case, Congress identified the Federal Reserve in statute as the funding source for the bureau, also known as the CFPB. Read more

Supreme Court Rules on National Bank Preemption

The justices on Thursday issued their opinion in Cantero v. Bank of America. The case arose under a New York state statute requiring banks to pay at least 2% interest on escrow accounts holding money that mortgage borrowers use to cover property taxes and insurance. Bank of America argued the law is preempted by the National Bank Act and the Dodd-Frank Act, which mandate that state banking laws regarding national banks be preempted if they interfere with a national bank’s exercise of its powers under federal law. The court held that because the lower court did not evaluate the law using the Dodd-Frank standard, the case must be remanded to the lower court with instructions to apply the standard at rehearing. Read more

Links

Letters and Testimony Reading Room Capitol to Capitol

Capitol to Capitol | June 3, 2024