Civil War Trust – Preserving America’s History

Civil War pic
Civil War
Image: civilwar.org

Martin Milita serves as a senior director at Duane Morris Government Strategies, a firm providing the full spectrum of government relations services, from business development to legislative lobbying. Outside of his work with DMGS, Martin Milita supports nonprofits like the Civil War Trust, which maintains as its primary mission the preservation of Civil War battlegrounds.

Today, much of the land that served as the site of battles during the Civil War has been or is in danger of being destroyed by development. In fact, only 20 percent of battlefields are protected as part of local, state, or national parks, or through the work of nonprofits like the Civil War Trust. As development continues, the trust estimates that the United States is losing important battlegrounds at the rate of one acre per hour.

To combat the loss of these historic sites, the Civil War Trust multiplies donations from both private and public entities to purchase land. In the past years, it has matched every dollar donated by members with outside grants, multiplying private donations by a factor of four. Over the years, the trust has used these funds to preserve over 40,000 acres of historically significant land.

Procurement Lobbying

There are two main types of lobbying, the exact legal definitions of which vary from state to state. The first type of lobbying is direct lobbying. In general terms, direct lobbying involves a person or entity attempting to influence legislation in a way that favors the client. Direct lobbyists typically interact with legislators or government employees involved in creating legislation.

The other main type of lobbying is known as grassroots lobbying. Grassroots lobbying focuses on influencing public opinion in favor of  or opposition to particular legislation. This type of lobbying also encourages members of the public to take action themselves in a variety of ways, such as by contacting their elected officials or signing petitions.

Often ignored by the vendor community is Procurement lobbying. This is of particular importance as federal, state, and local governments purchase trillions of dollars in goods and services.

Procurement lobbying involves appreciating:

  • all procurement lobbying laws in the 50 states, the federal government, and more than 230 municipal jurisdictions, along with common-language descriptions of these same ordinances and statutes.
  • advisory opinions interpreting lobbying laws
  • pay-to-play laws on every government level
  • full descriptions of registration and reporting requirements
  • jurisdictions requiring registration as a lobbyist for procurement activities
  • contingent lobbying prohibitions by jurisdiction
  • summaries of gift laws;

and pre-RFP pursuit, meaning shaping upcoming procurements in conformity with the above points.

It can be difficult to find the right person to talk to in Government Agencies and companies. That’s a major reason why people don’t do pre-RFP pursuit. It’s also why many companies are in perpetual sales mode.

Before you can influence the RFP or gain pre-RFP customer insight, you have to make contact with the right people at the customer. Here are some ways to do that:

  1. Past contracts. Sometimes the best source of data about future purchases starts by identifying who the buyers were for similar purchases in the past. So start with mining the data and looking up past contracts through online databases. The points of contact may not always be up to date, but it’s a good place to start.
  2. Associations. What associations might the customer belong to? Do they publish their membership or attendee lists? Do they hold meetings where you might meet face to face? Do they publish presentations or documents that might mention names?
  3. Councils, standards setting organizations, and committees. Are there any other organizations the customer might participate in? In addition to their membership list, do they publish minutes or other documents that might provide insight or contacts?
  4. LinkedIn profiles. Can you find your points of contact on LinkedIn? If you do, can you find their co-workers and business partners? In addition to searching by demographics, you can also search by acronyms, technical terminology, program names, functional terminology, etc.
  5. LinkedIn groups. Look up what groups on LinkedIn your customers have joined. If they post, see what you can learn. If they read, you have an opportunity to put words in front of them. Just simply knowing what groups they are in can provide insight. If you can’t find your customers’ profiles on LinkedIn, maybe you can find them in a relevant group.
  6. Trade shows and events. What trade shows and events do they host or participate in? Can you get introduced? Can you meet face to face? What can you learn? What can you demonstrate?
  7. Websites and org charts. Does the customer have a website? Does it name names? Does it have an org chart that can help you navigate? Can you do an image search for a relevant org chart?
  8. Publishers. There are companies that research, aggregate, and publish databases that include customer contact information. Some can save you a huge amount of time.
  9. Google. Learn how to use Boolean search operators. Then combine fragments of names, email addresses, titles, projects, technology, locations, etc. to see if you can find the needle in the haystack.
  10. Freedom of Information Act (FOIA).  If it’s a Government customer, you can try doing a FOIA for rosters, staff directories, points of contact, organization charts, committee memberships, attendance lists, etc.
  11. Teaming partners. Who do your subs or primes know? Can you get a referral or introduction?
  12. Alumni. Not yours. Theirs. Where did they go to school? Can you track them down through Alumni organizations or discover someone else who knows them?
  13. Certification registries. If their job requires specific certifications, are there lists or registries of people with that certification?
  14. Look for coordination points. Where does the customer’s organization need to coordinate with the outside world? That’s where people will be visible.
  15. Look for common interests, platforms, tools, and requirements. Show interest in their interests. Be where they will be. Then be helpful when they arrive.

Procurement Lobbyists can assist with all 15 approaches but most importantly they bring years of personal networking: a wide cast of personal relations to allow you to expand your network. Because it’s not about selling. It’s about getting to know each other and working together. It’s about professional development

This Week in Congress: Trade, Privacy, Fiscal Year 2017

The Senate will continue working its way through fiscal year 2017 appropriations bills this week, with final consideration of the Energy and Water bill expected on Tuesday. The House will work through a number of legislative items, including several related to trade and business practices. Both chambers are scheduled to adjourn at the end of this week for a one-week district work period.

The Senate is scheduled to return to legislative business on Monday afternoon and resume consideration of the legislative vehicle (H.R. 2028) for the FY 2017 Energy and Water appropriations bill, a $37.5 billion funding measure. A vote is expected Monday evening on an amendment offered by Sen. Patty Murray, D-Wash., and votes on at least three other amendments are expected on Tuesday before a vote on final passage. Energy and Water Appropriations Subcommittee Chairman Lamar Alexander, R-Tenn., has indicated he expects to wrap up consideration of the bill on Tuesday. Last week, the White House issued a veto threat for the bill, citing “the inclusion of problematic ideological provisions that are beyond the scope of funding legislation,” a reference to policy riders. One of the major concerns behind the veto threat was an amendment offered last week by Sen. John Hoeven, R-N.D., to prevent the Army Corps of Engineers from using any funds to implement its “Waters of the United States” rule, which extends federal jurisdiction under the Clean Water Act over a wider range of domestic wetlands and waterways. Sen. Hoeven’s amendment failed, however, to receive the 60 votes that were needed for inclusion in the underlying bill. It is unclear if the White House will maintain its opposition to the Energy and Water bill, but in the wake of the failure of the Hoeven amendment, conservative groups are encouraging senators to oppose the bill. Notwithstanding this source of opposition, the legislation is expected to receive bipartisan support and pass the Senate.

Following the adoption of the Energy and Water bill, which is the first FY 2017 appropriations measure on the Senate floor, the chamber is expected to continue with consideration of one of the three other funding bills that have been reported out of the Senate Appropriations Committee over the past two weeks: the Military Construction and Veterans Affairs appropriations bill; the Commerce, Justice and Science appropriations bill; or the Transportation-Housing and Urban Development appropriations bill. The Military Construction and Veterans Affairs bill is likely next on the Senate agenda, because it was reported out of the Appropriations Committee earlier this month with the Energy and Water Development bill and is considered one of the less controversial of the 12 annual bills.

Press reports indicate that negotiations in the Senate to provide $1 billion in supplemental appropriations to combat the Zika virus in the United States are progressing. Earlier this year, the White House requested $1.8 billion in emergency funding to accelerate the federal response timeline, bolster mosquito control, and support training programs and laboratory capacity to test for the virus. Several congressional Republicans rebuffed this request, suggesting Congress should instead shift unused funds allocated to fight the Ebola virus after that 2014 outbreak in West Africa subsided. Conservatives are also requesting that any allocated funds be offset with cuts elsewhere in the budget. The warmer weather of spring and summer months, and reports of the virus spreading within the U.S., appear to have softened the positions of some Senate Republicans and Appropriations Committee members who are now involved in the funding negotiations, and a bill on that may hit the floor as early as this week. House Republicans are still resisting the request for emergency Zika funds, demanding that the administration provide more specific details on how it plans to spend such funding, although House Appropriations Committee Chairman Hal Rogers, R-Ky., has indicated he expects the House will eventually also pass a Zika-funding measure.

The House of Representatives will return to legislative business on Tuesday, with votes expected on 15 bills under suspension of the rules. Fourteen of these bills cover a variety of topics and come to the floor from the Homeland Security, Oversight and Government Reform; Transportation and Infrastructure; and Financial Services committees. On the 15th, H.R. 1493, the Protect and Preserve Cultural Property Act, the House will vote to approve amendments made to the bill by the Senate; once approved, the bill will head to the president for signature.

On Wednesday, the House will consider an additional four bills under suspension of the rules. Included among these are H.R. 4923, the American Manufacturing Competitiveness Act of 2016, sponsored by Ways and Means Committee Chairman Kevin Brady, R-Texas. The bill would update and reform the Miscellaneous Tariff Bill (MTB) process by which reductions or temporarily suspensions of tariffs or duties on certain imports are considered. The last MTB expired in 2012, leaving many American manufacturing companies at a disadvantage in the global economy because of the costs related to the importation of covered foreign goods. The bill enjoys broad support among businesses and is expected to pass.

The House will also consider S. 1890, the Defend Trade Secrets Act, under suspension of the rules. This legislation will create a federal civil claim and remedy for trade secret misappropriation. A wide-ranging coalition of companies and businesses supports the passage of this bill, which passed the Senate earlier this month by a vote of 87-0. Once passed by the House, this bill will head to the president, who is expected to sign it.

The Wednesday suspension package also includes H.R. 699, the Email Privacy Act, legislation to update the 1986 Electronic Communications Privacy Act. The bill enjoys more than 300 cosponsors, and a compromise version was favorably reported on a unanimous vote by the Judiciary Committee two weeks ago. The bill is not expected to get Senate consideration this year, but its approval by the House will likely set the stage for a legislative enactment in 2017. Finally on Wednesday, the House will consider H.R. 4240, the No Fly for Foreign Fighters Act. This bill would require an independent review by the Government Accountability Office of the federal government’s terrorist watchlists to determine whether past weaknesses with them have been addressed or whether additional changes are needed.

Following its heavy schedule of suspension bills, the House will consider three more bills, all coming to the floor under rules.

The House will first tackle H.R. 4498, the Helping Angels Lead Our Startups (HALOS) Act, introduced by Small Business Committee Chairman Steve Chabot, R-Ohio. This bill would require the U.S. Securities and Exchange Commission to revise its general solicitation regulations to provide carveouts for certain activities related to startup investment and financing pitches.

The House is expected to consider H.J. Res. 88, a disapproval resolution intended to block the U.S. Department of Labor’s controversial “fiduciary” rule. The rule sets new standards for investment advisers with respect to retirement accounts, but Republicans believe the rule is too burdensome and that the costs will ultimately be borne by low- and middle-income Americans, who most need the advice but will be unable to get it.

The House will also vote on H.R. 4901, the Scholarships for Opportunity and Results (SOAR) Reauthorization Act. This legislation provides scholarships to students from low-income families in the District of Columbia to attend the school of their choice, including private or charter schools, and provides money to D.C. charter and public schools to improve educational outcomes.

On the hearing front, both the House and Senate Appropriations Committees are expected to continue their consideration of FY 2017 funding bills this week. Defense Secretary Ashton Carter is scheduled to appear before the Senate Appropriations Defense Subcommittee on Wednesday to discuss the FY 2017 budget request and Department of Defense funding.

Related to defense spending priorities, the full House Armed Services Committee will be holding a markup of its 2017 National Defense Authorization Act for 2017 on Wednesday morning, a $610 billion blueprint for the defense budget for FY 2017, following markups in the committee’s subcommittees last week.

House Energy and Commerce Committee Chairman Fred Upton, R-Mich., announced that the committee will be marking up 12 bills, all reported favorably by the Health Subcommittee last week, related to the domestic opioid. The legislation includes measures that range from expanding access to Naloxone (medication that can reverse the effects of an opioid overdose) and providing an exemption from civil liability for trained and certified individuals who administer opioid overdose-reversing drugs, to increasing access to medication-assisted treatment. Chairman Upton has said the full House will consider the legislation during the first or second week of May. Likewise, the House Judiciary Committee is expected to mark up its portion of the opioid-response bill on Wednesday as well, though the committee will not formally notice its markup till Monday. The Senate already passed its version of opioid abuse legislation, the Comprehensive Addiction and Recovery Act (CARA), in March. There is wide support in Congress for advancing legislation to counter the opioid abuse epidemic, and if the bills can be conferenced following successful House passage, to resolve differences between them, it may be one of the few bipartisan measures that can pass both chambers during the remainder of this Congress.

The Senate Commerce, Science and Transportation Committee will be marking up its Federal Communications Commission reauthorization bill on Wednesday morning, along with seven other communications bills. The legislation would provide a two-year reauthorization of FCC authority and appropriations and, among other things, reform the agency’s spectrum auction procedure, enhance agency transparency by requiring the FCC to submit various reports and budget estimates to Congress, and require the GAO to provide an analysis of whether the FCC’s current regulatory fee structure correlates to the actual workload of the FCC. Also scheduled for markup is S. 421, Federal Communications Commission Process Reform Act, to reform aspects of the FCC’s rulemaking process.

Tax reform continues to be a matter of congressional focus. The Senate Finance Committee is holding a hearing on Tuesday afternoon on navigating business tax reform, with Thomas Barthold, chief of staff for the Joint Committee on Taxation, scheduled to appear as a witness.

The Finance Committee is also holding a Thursday hearing on mental health issues. Like the opioid abuse crisis, many members are eager to advance legislation to assist with mental health reform, but there remain partisan differences over how to pay for reforms and updates. The Thursday hearing is expected to cover the Medicaid Institutions for Mental Diseases (IMD) Exclusion, which restricts Medicaid reimbursements for care at inpatient mental health treatment centers.

On Wednesday, the Senate Foreign Relations Committee will be reviewing U.S.-China relations, likely driven by China’s recent activities in the South China Sea. Deputy Secretary of State Anthony J. Blinken is scheduled to provide testimony before the committee.

The House Oversight and Government Reform Committee meets Thursday to review the release of criminal aliens by the Department of Homeland Security and the impact on public safety. This hearing follows one held two weeks ago by the House Judiciary Committee on the same topic at which families and survivors of violent attacks by criminal aliens testified.

 

Preservation Efforts for the Gettysburg Civil War Battlefield

Civil War pic
Civil War
Image: civilwar.org

The senior director of Duane Morris Government Strategies LLC, Martin Milita is a public affairs professional based in New Jersey. Outside of his professional life, Martin Milita is a supporter of the Civil War Trust’s Gettysburg preservation efforts.

The Civil War Trust and its partner organizations have devoted time and effort to preserving 927 acres of the land upon which the iconic Battle of Gettysburg was fought. Though large, central sections of the battlefield are protected within the boundaries of the Gettysburg National Military Park and the Eisenhower National Historic site, various additional tracts of historic lands on the outskirts of the main battlefield have been purchased by the Civil War Trust. Upon purchase, the lands are shielded from new development via conservation easements or transfer to the National Park Service or other preservation groups.

Many of the protected sites were once the locations of family farms and antebellum houses, where field hospitals and cavalry staging areas were set up by both armies. To learn more about the history behind the Gettysburg Battlefield and related conservation efforts, visit the Civil War Trust’s website at www.civilwar.org.

The Future of Fracking in New Jersey

Martin Milita pic
Martin Milita
Image: dmgs.com

A senior director at Duane Morris Government Strategies, Martin Milita also has more than 10 years of experience at Holman Public Affairs, LLC. Recently, Martin Milita was recently named as the monitor of Mazza & Sons, Inc., a solid waste, transporting, and recycling company, by the state’s department of environmental protection. In addition to solid waste, New Jersey is also dealing with the issue of fracking.

Although fracking has caused domestic energy production to increase and consequently reduced the country’s dependence on certain energy sources, studies show it poses a risk to drinking water and other natural resources. Fracking, or hydraulic fracturing, is the process through which natural gas is harvested from the ground by pumping water, chemicals, and sand into the pocket and forcing it into a collection system. The process creates waste that is usually treated and emptied into rivers or injected deep into the ground.

New Jersey—where pipelines run from Pennsylvania to New York, wastewater is treated, and a possible fracking location was recently discovered—banned fracking until 2013. In May 2014, the state senate passed a bill to ban fracking and wastewater treatment and transportation permanently. When the state senate passed a similar bill in 2011, Governor Chris Christie allowed it to go into effect for a year. The New Jersey ban is part of a larger effort in the northeast to tighten regulations on fracking and its wastewater.

NJ bidders may need to submit a gender equity repo

Companies that bid on New Jersey state contracts would have to ensure their gender-based pay equity and job equality standards under a Democrat-backed bill that passed the state Assembly Thursday.

Assembly Bill 883 — as a part of a package of Bills aimed at combating poverty and rebuilding the state’s middle class — would require every government contract bidder to submit a gender equity report to the Division of Purchase and Property in the State Department of the Treasury.

The report would measure the extent to which men and women employees perform the same or comparable work at different rates of pay and the extent to which job titles may be predominately held by members of the same gender, according to the bill’s language.

Introduced in January, the proposed law was previously reviewed by the Assembly State and Local Government Committee and received 46-17-9 approval Thursday.

Under A883, the purchase and property division would develop a system for bidders to measure and remedy gender-based pay gaps and gender-based segregation of job titles, along with uniform reporting instructions and criteria. Bidders would also get technical assistance with the reporting, the bill said.

Bidders for emergency contracts would be exempt from the law, as would contracts paid in whole or in part by federal funds if the application of the rules would impact eligibility to receive the funds, the bill said.

Muoio and Lampitt were joined in their sponsorship by Gabriela M. Mosquera, D- Camden, John F. McKeon, D-Morris, and Mila M. Jasey, D-Essex. Muoio, Lampitt and Mosquera introduced the legislation during the last session in June, but it stalled in the Assembly State and Local Government Committee.

The proposal has drawn criticism from the New Jersey Institute for Civil Justice, which described the legislation as a “complex and intrusive legislative scheme.”

The group feels the statistics would defeat the purpose of market wages, which they say provide a measure of a particular job’s worth and encourage people to take jobs for which demand exceeds supply. The reporting requirement itself would create a “treasure trove” of data that could leave employers vulnerable to lawsuits, the group said.

The group further contends that workplace gender equality statistics reflect disparities. Education, profession, experience or hours worked are among the “countless individual, voluntary choices that add up to statistical disparities in the aggregate,” the group said.

“The reality is that the existing anti-discrimination legal framework reflects a strong social consensus against discrimination based on sex,” the NJICJ said in a statement Friday. “The attempt to further regulate employee compensation and expose employers to litigation will succeed primarily in distorting labor markets and increasing the cost and risk of hiring new employees.

Lampitt, who authored legislation requiring employers to post wage discrimination notices in the workplace, countered that the current anti-discrimination statutes aren’t focused enough on women.

“If discrimination [laws are] already on the books, then why is it still happening?” she said.

Lampitt also addressed the statistics that would be provided, noting that citizens can find out information about public entities through the state’s Open Public Records Act. She asked why the private sector’s statistics shouldn’t be publicly available as well.

 

This Week in Congress

This week, both chambers will be in session, kicking off three busy weeks of legislative activity before the next scheduled recess. The Senate will resume consideration of its proposal to reauthorize the Federal Aviation Administration, while the House will be taking up legislation related to the Federal Communications Commission’s net neutrality rules and two bills related to domestic finance reforms.

The Senate is scheduled to return on Monday and resume consideration of H.R. 636, the vehicle for the FAA reauthorization bill authored by Commerce, Science, Transportation Committee Chairman John Thune, R-S.D., and Ranking Member Bill Nelson, D-Fla. Consideration of the bipartisan bill will be interrupted briefly on Monday with a vote expected on the nomination of a federal district judge. The Senate is expected to spend the entire week on the FAA reauthorization bill and consider several amendments.

Final passage of the legislation may be held up over unrelated tax provisions that Senate Democrats are attempting to attach to the bill. Passage of the fiscal year 2015 omnibus spending measure last year included a package of tax credit renewals, including credits for solar and wind power, but the package left out other renewable energy sources, such as biomass, fuel cell and geothermal energy. Clean energy advocates claim the provisions were omitted from the omnibus inadvertently and would like to attach the extension of these tax credits to the must-pass FAA reauthorization bill. While the clean-energy tax credits do have the support of some congressional Republicans, more than two dozen conservative organizations oppose the inclusion of the tax-credit extensions in the FAA bill. In addition, Finance Committee Ranking Member Ron Wyden, D-Ore., who is leading the effort to renew the clean-energy credits, is also reportedly seeking to add his bill to reform the federal taxes on beer and hard cider. The timeline to resolve these issues is constrained because the bill will still need consideration in the House, where many members are likely to oppose the tax provisions. The FAA bill itself must be enacted by July 15, when the current authority for the agency expires.

On the other side of the Capitol, the House of Representatives is scheduled to return following its recent two-week recess. The big news is not what will be on the floor, but what will not. Under the Budget Act, a budget is due by April 15. As we have reported previously, sharp disagreements among Republicans over a proposed budget appear to remain unresolved, and the House, whose leaders had hoped to tackle the budget resolution this week, will be considering other matters.

The House returns on Tuesday, with votes expected on four bills under suspension of the rules. Among these is H.R. 2947, a bill sponsored by Rep. Dave Trott, R-Mich., to undo the orderly liquidation authority for large banks enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In place of that authority — which Republicans have believed, since Dodd-Frank was being debated, makes the process too political — the bill would allow banks to pursue resolution under judicial supervision through a new provision of the Bankruptcy Code.

On Wednesday, members will vote on six additional bills under suspension of the rules, all reported out of the Foreign Affairs and Homeland Security Committees.

On Thursday, the House plans to take up H.R. 3791, legislation that would raise the consolidated assets threshold under the Federal Reserve’s Small Bank Holding Company Policy Statement. The bill would expand the threshold under which banks can fall under the less onerous requirements of the Fed’s policy statement from the current $1 billion to institutions with assets of less than $5 billion. Consideration of H.R. 3791 will be subject to a rule.

Following consideration of H.R. 3791, the House will take up H.R. 3340, the Financial Stability Oversight Council Reform Act, subject to a rule. The FSOC was established under the Dodd-Frank Act to identify and respond to risks to U.S. financial stability. By statute, the FSOC is authorized to designate nonbank financial companies that could pose a risk to U.S. financial stability (known as “systemically important financial institutions,” or SIFIs) for heightened regulation and supervision by the Federal Reserve Board and to recommend new or heightened standards and safeguards for systemically significant financial activities or practices. Republicans have been critical of the powers granted to this new entity and the lack of transparency in its evaluation and designation processes. H.R. 3340 would give Congress the power to approve the budget for FSOC and the Office of Financial Research (OFR), create quarterly reporting requirements for OFR, and require OFR to provide at least a 90-day public notice and comment period before issuing any report, rule or regulation. Consideration of this bill comes on the heels of a ruling issued March 30 overturning the FSOC’s designation of insurance company MetLife as a SIFI. The FSOC has already filed an appeal of this ruling.

On Friday the House will meet to consider H.R. 2666, the No Rate Regulation Broadband Internet Act, subject to a rule. This controversial legislation, reported out of the Energy and Commerce Committee by a 29-19 vote, would prohibit the FCC from regulating the rates charged for broadband Internet access service. Following the FCC’s issuance of newly formulated net neutrality rules last year, Chairman Tom Wheeler promised members of Congress that the agency would not regulate broadband rates in the same manner as other public utilities. Republican sponsors of the bill argue the legislation is necessary to reinforce this promise, but opponents, including Chairman Wheeler and the White House, argue that the bill is too vague and could be interpreted broadly enough to have a negative impact on FCC authority in enforcing the net neutrality rules.

Related to the FCC, on Wednesday the Energy and Commerce Committee will be marking up several pieces of noncontroversial legislation, but one item related to FCC subsidies for phone and Internet services is likely to have heated debate. H.R. 4884 would place an annual cap of $1.5 billion on support provided through the Lifeline program, which offers a discount on phone and Internet service for qualifying low-income consumers. However, the program is fraught with waste, fraud and abuse, and members of Congress have been negotiating with the FCC to make meaningful reforms and provide better oversight. Democrats on the Energy and Commerce Committee have voiced their opposition to the bill, calling the $1.5 billion cap too low.

Also on the hearing schedule this week are several events related to cybersecurity and technology. The House Judiciary Committee is holding a Wednesday markup of H.R. 699, the E-Mail Privacy Act, legislation that would reform a 1986 statute that was enacted before email became a daily necessity for communication. The legislation, intended to boost privacy and revise the current statute to conform to recent court decisions, would require law enforcement to obtain a warrant based on probable cause before accessing the content of email messages stored for longer than 180 days. Current law only requires a warrant for the content of emails less than six months old; those older than six months are deemed business records under the current statute and may be accessed with a subpoena rather than a judicially issued warrant. The bill has more than 300 bipartisan co-sponsors. Committee Chairman Bob Goodlatte, R-Va., circulated a substitute amendment on Friday in an effort to address the concerns of law enforcement responsible for the committee’s delay in moving the bill forward.

On Thursday, the House Transportation and Infrastructure Subcommittee on Economic Development, Public Buildings and Emergency Management will hold a hearing regarding the U.S. electric grid’s ability to withstand cyberattacks.

Also on Thursday, the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet meets to review patent litigation at the International Trade Commission. There has been a substantial rise in the number of infringement claims brought before the ITC in recent years, many of the cases brought by patent-assertion (or nonpracticing) entities.

With the filing deadline for income tax returns approaching this Friday, several tax-related hearings will be occurring throughout the week on both sides of the Capitol. The Senate Finance Committee and House Science, Space and Technology Committee are hosting hearings regarding cybersecurity and protecting taxpayer information. IRS Commissioner John Koskinen and IRS Chief Technology Officer Terence Milholland will be appearing before the Senate Finance Committee on Tuesday morning alongside other officials from the U.S. Treasury and Government Accountability Office to discuss tools and technologies in place to safeguard American taxpayers and their personal information from getting into the wrong hands. Several of these witnesses will also be appearing before the House Science Committee on Thursday morning to discuss the same topic. On Wednesday, the House Ways and Means Subcommittee on Tax Policy is hosting the second in a series of hearings on member proposals relating to tax reform proposals. This hearing will focus in particular on income tax reform proposals.

The House Natural Resources Committee will meet on Wednesday to review a discussion draft of the Puerto Rico Oversight, Management and Economic Stability Act, a debt relief package for the island territory. The committee released a draft last week that was subject to sharp criticism from the left and the right; a revised proposal is expected to be circulated by the committee on Monday. The current draft proposes a restructuring of the $72 billion debt and places Puerto Rico’s finances under the oversight of a federally appointed oversight board and authorizes the board to restructure the Commonwealth’s debt, including allowing for bankruptcy-like filings by both municipal corporations (similar to Chapter 9 of the Bankruptcy Code) and by Puerto Rico itself (authority no state enjoys).

The Senate Judiciary Committee continues its review of the Investor Visa, or EB-5 Visa Program, and current abuses during a scheduled Wednesday hearing. The program, designed to allow foreign investors to gain permanent residence in the United States, is currently set to expire on Sept. 30. This hearing is the second the committee has held since an effort to reform the program to eliminate abuses was stopped at the end of last year during closed-door negotiations. The House Judiciary Committee has also held a hearing this year on the subject.

The threat of the Islamic State to homeland security remains the subject of congressional discussion and concern. The Senate Foreign Relations Committee meets Tuesday to discuss the spread of ISIS. The House Foreign Affairs Subcommittee on Asia and the Pacific will pursue a similar topic on Wednesday with a hearing on the threat of the Islamic State in Southeast Asia.

With the current stalemate over the FY 2017 budget resolution and spending caps, the House Rules Subcommittee on Rules and Organization of the House is scheduled to hold a Thursday hearing to examine “proposed reforms to Rule XXI and the modern authorization and appropriations process.” House leadership does not seem to have made any headway over the recess in negotiating an agreement over a topline funding number for FY 2017 and it remains highly likely the chamber will miss the April 15 target date for completion of a budget resolution.

As we have previously reported, the Senate Appropriations Committee is not waiting for the House to take action on a budget resolution and is moving forward with drafting appropriations bills using the $1.07 trillion top-line spending number set by last year’s Bipartisan Budget Act. The full committee meets Thursday to publicly release the 302(b) allocations for individual subcommittees and to mark up the Energy and Water Development Appropriations Act and Military Construction, Veterans Affairs and Related Agencies Appropriations Act.

Inversion Regs Cast Wider Net

The U.S. Department of the Treasury on Monday issued rules to curb tax-motivated inversions, and while much of the immediate attention focused on how they would affect the proposed Pfizer-Allergan merger, the regulations could ensnare other kinds of cross-border deals or even domestic transactions.

The regulations issued Monday formalized notices put out by the Treasury in 2014 and 2015 saying the administration would write rules to make it more difficult for companies to merge with competitors in low-tax jurisdictions. The regulations included new measures not mentioned in the previous announcements, such as a provision to prevent companies from getting around existing inversion rules by acquiring multiple companies over a short time, as Allergan Inc. has done.

The Treasury also issued proposed regulations to combat the practice of earnings stripping, one of the primary ways inverted companies reap tax benefits from inversions and which involves saddling domestic affiliates with debt and taking a U.S. tax deduction on the interest.

The government may have written the rules to target inversions, but the more than 300 pages of regulations touch on so many different sections of the tax code that other transactions could be caught up as well.

Firms may have to take another look at deals going back more than a year and a half to see if they comply with the rules. The regulations implementing the 2014 notice apply to transactions completed on or after Sept. 22, 2014, while the regulations formalizing the 2015 announcement apply to acquisitions completed on or after Nov. 19, 2015. The new measures introduced Monday apply to transactions completed on or after April 4.

The proposed earnings-stripping regulations in particular have a wide scope that goes well beyond inversions and would encompass debt transactions that are commonly used by multinational or domestic groups of related corporations.

Under the proposed rules, the IRS said it would treat as stock certain transactions that would otherwise be considered debt, such as instruments issued by a subsidiary to its foreign parent in a shareholder dividend distribution or instruments issued in connection with some acquisitions of stock or assets from related corporations in transactions economically similar to dividend distributions.

The proposed regulations specifically mention a court case from 1956, Kraft Foods Co. v. Commissioner, in which the Second Circuit considered a domestic corporate subsidiary that issued indebtedness in the form of debentures to its sole shareholder, which was also a domestic corporation, in the payment of a dividend. In the case, the government argued that the transaction may have been a sham and should have been treated as stock, but the court sided with Kraft, saying the debentures should be respected as debt.

In the proposed regulations, the IRS said going forward it would treat a debt instrument issued in fact patterns similar to that in Kraft as stock, thus unsettling well established law.

The breadth of the regulations will have implications well beyond inversions and will affect not only foreign companies and inverted companies but U.S. companies as well, Bazar said.

One of the new provisions in Monday’s regulations would target so-called serial acquirers who purchase multiple U.S. companies in quick succession to get around an existing rule that penalizes inversions in which the former stockholders of the U.S. company retain at least 60 percent ownership in the newly combined foreign company. If the former stockholders retain at least 80 percent ownership of the new company, the transaction is completely disregarded for U.S. tax purposes.

In the regulations, the Treasury said it was concerned that a serial acquirer could subvert the rule by issuing stock with each successive purchase of a U.S. company, thereby increasing its ownership and enabling acquisition of an even greater domestic company without crossing the 60 percent threshold. To that end, the regulations exclude from that ownership calculation stock that is issued by a foreign corporation in connection with the acquisition of U.S. entities in the prior three years.

 

This week in Congress

Senators return to Washington on Monday after a two-week recess for a scheduled vote on bipartisan legislation to protect trade secrets- the House rather continues its spring recess until next week.

The Senate is scheduled to open on Monday afternoon with consideration of S. 1890, the Defend Trade Secrets Act. Currently, trade secrets lack federal civil protection for misappropriation. S. 1890 will provide trade secret owners with the same access to federal court that copyright, trademark and patent owners already enjoy. This bipartisan legislation is of widespread interest to U.S. businesses fending off efforts, often driven by foreign competitors, to steal their trade secrets. In its report to accompany the bill, the Senate Judiciary Committee noted the “economically damaging” effect of trade secret theft on the American innovative economy, costing an estimated $300 billion. With 65 cosponsors, the bill is expected to pass the Senate by a wide margin on Monday. (Note the authors and their firm represent a coalition of companies advocating for the Defend Trade Secrets Act.)

Senate Majority Leader Mitch McConnell, R-Ky., has not yet given a clear indication of what business the Senate will focus on for the remainder of the week. One potential item on the agenda could be consideration of a Federal Aviation Administration reauthorization bill (S. 2658) reported out of the Senate Commerce, Science and Transportation Committee on March 16. The bipartisan legislation would reauthorize FAA programs and authority through Sept. 30, 2017, and contains provisions related to drone operations, improving consumer protections, and aircraft certification processes. House Transportation and Infrastructure Committee Chairman Bill Shuster, R-Pa., introduced a five-year FAA reauthorization bill (H.R. 4441) in February, but the bill contains several proposals that are highly controversial, including a provision to privatize the country’s air traffic control system. The House bill in its current form is unlikely to see a vote on the House floor because of a dispute between the Transportation Committee and the Ways and Means Committee over the privatization provision. Should the full Senate approve S. 2658, the House may take it up for consideration or act on a new bill and request a conference with the Senate. In either scenario, Republican leadership and Transportation committee chairmen are working with a limited timeline, given the current extension of FAA authority and appropriations, passed by both chambers in March, expires on July 15.

One item that remains to beadressed on the Senate floor is S. 2012, the bipartisan comprehensive energy bill (S. 2012), which first fell victim to partisan debate over an amendment regarding the Flint, Michigan, water infrastructure cleanup and then to a proposed amendment on revenue sharing for offshore drilling. The energy bill managers and Senate leadership had been optimistic of final passage when debate began in January, but it appears the underlying bill will remain stalled.

Leader McConnell has also indicated he would like to begin work on fiscal year 2017 appropriations measures. The Senate Appropriations Committee has been moving forward with drafting appropriations bills using the $1.07 trillion top-line spending number set by last year’s Bipartisan Budget Act, although the chairman has not yet publicly released any notice for scheduled markups. While it could be possible for the Senate to move through several noncontroversial appropriations bills over the next several weeks, there still is no consensus strategy for congressional approval of FY 2017 spending. As we have discussed in previous columns, the House Republican conference remains divided over top-line spending numbers for FY 2017, which limits the prospects of any Senate-passed spending measure seeing action in the House.

Homeland security and the threat of ISIS will be on topic when Senators return to Capitol Hill, in light of the March 22 terror attacks in Brussels, Belgium, which occurred during the Senate break. Two Senate hearings this week will focus on this topic. The Homeland Security and Governmental Affairs Committee will hear from former CIA Director James Woolsey and several foreign policy experts on Tuesday morning regarding the recent terror attacks in Europe and methods of protecting U.S. citizens at home and abroad. The Commerce, Science and Transportation Committee will meet Wednesday morning to discuss the attacks on the Brussels airport and metro system. TSA Administrator Peter Neffenger, who was in Brussels at the time of the March 22 attacks, will deliver testimony about TSA efforts to prevent attacks on passenger and freight targets that could lead to mass casualties.

Also on the Senate hearing schedule are two Banking Committee events related to consumer finance. The committee has scheduled a Tuesday hearing to assess the effects of consumer finance regulation. On Thursday, Consumer Financial Protection Bureau Director Richard Cordray will appear before the committee to report on the bureau’s activities, which many Republicans would like to restrict. Director Cordray delivered similar testimony on March 16 before the House Financial Services Committee and faced tough questioning and abundant criticism of the agency’s actions.

The Foreign Relations Committee is scheduled to meet on Tuesday regarding the enforcement of the Iran nuclear agreement after Iran’s Revolutionary Guards conducted ballistic missile tests in March. While Iran claims the tests were conducted for self-defense purposes, Foreign Relations Committee Chairman Bob Corker, R-Tenn., believes the missile tests are in direct violation of U.N. Security Council Resolution 2231, adopted in July 2015 to enforce the multilateral nuclear agreement. Two bills that would impose tougher sanctions on sectors of the Iranian economy found supporting Tehran’s ballistic missile programs are currently pending in the Senate. Chairman Corker and Ranking Member Ben Cardin, D-Md., have publicly stated their support for advancing bipartisan sanctions legislation. Undersecretary of State for Political Affairs Thomas Shannon is the sole witness scheduled to appear at the Tuesday hearing.

On Wednesday, the Committee on Health, Education, Labor and Pensions is scheduled to hold another in its series of markups dealing with aspects of medical innovation. This week’s markup will tackle several bills, including one to authorize the administration’s Precision Medicine Initiative.

The full Senate hearing schedule for the week ahead is included below.

 
CALENDAR

Monday, April 4, 2016

Senate Committees

Pending Nominations
Senate Homeland Security and Governmental Affairs
Full Committee Markup
5:30 p.m., S-216
Tuesday, April 5, 2016

House Committees

Bridging the Gap—Increasing Access to Venture Capital for Small Businesses
House Small Business – Subcommittee on Economic Growth, Tax and Capital Access
Subcommittee Field Hearing
1 p.m., Pasadena City Hall, 100 Garfield Avenue, Pasadena, CA 91101

Small Defense Contractors
House Small Business – Subcommittee on Contracting and Workforce
Subcommittee Field Hearing
5 p.m., Palmdale City Hall Chamber Room, 38300 Sierra Highway, Palmdale, CA 93550

Senate Committees

U.S. Cyber Command
Senate Armed Services
Full Committee Hearing
9:30 a.m., 216 Hart Bldg.

Assessing the Effects of Consumer Finance Regulations
Senate Banking, Housing and Urban Affairs
Full Committee Hearing
10 a.m., 538 Dirksen Bldg.

Oversight of U.S.-Affiliated Islands Issues
Senate Energy and Natural Resources
Full Committee Hearing
10 a.m., 366 Dirksen Bldg.

Recent Iranian Actions and Implementation of the Nuclear Deal
Senate Foreign Relations
Full Committee Hearing
10 a.m., 419 Dirksen Bldg.

Terror in Europe: Safeguarding U.S. Citizens At Home and Abroad
Senate Homeland Security and Governmental Affairs
Full Committee Hearing
10 a.m., 342 Dirksen Bldg.

Army Modernization
Senate Armed Services – Subcommittee on Airland
Subcommittee Hearing
2:30 p.m., 232-A Russell Bldg.

State of Public Shipyards
Senate Armed Services – Subcommittee on Readiness and Management Support
Subcommittee Hearing
2:30 p.m., 222 Russell Bldg.

Section 5 and ‘Unfair Methods of Competition’: Protecting Competition or Increasing Uncertainty?
Senate Judiciary – Subcommittee on Antitrust, Competition Policy and Consumer Rights
Subcommittee Hearing
2:15 p.m., 226 Dirksen Bldg.
Wednesday, April 6, 2016

Senate Committees

USDA Rural Development Programs
Senate Agriculture, Nutrition and Forestry – Subcommittee on Rural Development and Energy
Subcommittee Hearing
10 a.m., 328-A Russell Bldg.

Transportation Security: Protecting Passengers and Freight
Senate Commerce, Science and Transportation
Full Committee Hearing
10 a.m., 253 Russell Bldg.

Nuclear Regulatory Commission Budget
Senate Environment and Public Works
Full Committee Hearing
10 a.m., 406 Dirksen Bldg.

Pending Legislation
Senate Health, Education, Labor and Pensions
Full Committee Markup
10 a.m., 216 Hart Bldg.

Navy Shipbuilding
Senate Armed Services – Subcommittee on Seapower
Subcommittee Hearing
2 p.m., 222 Russell Bldg.

Pending Legislation
Senate Indian Affairs
Full Committee Hearing
2:15 p.m., 628 Dirksen Bldg.

Small Business Disaster Recovery and the RISE Act
Senate Small Business and Entrepreneurship
Full Committee Hearing
2 p.m., 428-A Russell Bldg.
Thursday, April 7, 2016

House Committees

Cyber Preparedness and Response at the Local Level
House Homeland Security – Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies
Subcommittee Field Hearing
11 a.m., Austin College, J.E. and L.E. MaBee Foundation Banquet Hall, 1301 E. Brockett, Sherman, TX 75090

Senate Committees

Army Posture
Senate Armed Services
Full Committee Hearing
9:30 a.m., G-50 Dirksen Bldg.

Lerner/Gerety Nominations (Treasury)
Senate Banking, Housing and Urban Affairs
Full Committee Markup
10 a.m., 538 Dirksen Bldg.

CFPB Report to Congress
Senate Banking, Housing and Urban Affairs
Full Committee Hearing
10 a.m., 538 Dirksen Bldg.

U.S. Geological Survey Oversight
Senate Energy and Natural Resources
Full Committee Hearing
10 a.m., 366 Dirksen Bldg.

The Federal Role in Keeping Water and Wastewater Infrastructure Affordable
Senate Environment and Public Works
Full Committee Hearing
10 a.m., 406 Dirksen Bldg.

A Progress Report on the West Africa Ebola Epidemic
Senate Foreign Relations – Subcommittee on Africa and Global Health Policy
Subcommittee Hearing
10 a.m., 419 Dirksen Bldg.