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.


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.

Hospitals avoid new local-tax burden-Energy and Environment Bills Signed Into Law

New Jersey Governor Chris Christie vetoed a bipartisan proposal that would have required nonprofit hospitals to pay new fees to municipal governments to help cover the cost of police, fire, and other local services in exchange for maintaining the property-tax exemption they have long enjoyed. The bill was prompted by a landmark state tax-court ruling in 2014 that successfully challenged the property-tax exemption enjoyed by nonprofit Morristown Medical Center, given that it also operates several for-profit services at the same Morris County site.

The pocket veto encourages uncertainty where the bill could have secured the legal future of hospitals. Legislators intended their efforts to avoid similar lawsuits around the state, but with the veto the state may see an untimely increase in litigation.

The move was more of a disappointment than a surprise, legislators said.

Energy and Environment Bills Signed Into Law

S-2617/A-3944 (Cardinale/Garcia, McKeon, Auth, Eustace, Pinkin) – Requires DEP to adopt regulations to allow cultivation of commercial shellfish species in certain coastal and inner harbor waters for research, educational, or restoration purposes; requires community engagement process for revision thereof

S-2880/A-4704 (Lesniak, T. Kean/Diegnan, Wisniewski) – Provides up to $25 million in tax credits under Economic Redevelopment and Growth Grant Program for certain infrastructure at Rutgers, the State University of New Jersey

S-3321/A-4927 (Smith, Van Drew, Bateman/Spencer, Rumana) – Authorizes DEP to require public access to waterfront and adjacent shoreline as condition of waterfront development approvals and CAFRA permits

A-1726wGR/S-308 (Eustace, Lagana, Mosquera, Vainieri Huttle, Wimberly/Gordon) – Amends “Flood Hazard Area Control Act” to require DEP to take certain actions concerning delineations of flood hazard areas and floodplains

A-1812/S-2717 (Mosquera, Mazzeo, Andrzejczak/Cruz-Perez, Oroho, Jones) – Extends protections of the new vehicle “lemon law” to new farm tractors purchased or leased in New Jersey

A-1958/S-1848 (Allen, Van Drew) – Concerns exemptions from permits for certain agricultural activities under “Freshwater Wetlands Protection Act”

A-2839/S-2620 (Burzichelli, Space, Phoebus/Oroho, Turner) – “New Jersey Rural Microenterprise Act”

A-3257wGR/S-2125 (Andrzejczak, Mazzeo, Burzichelli/Van Drew) – Provides that determination by county agriculture development board or State Agriculture Development Committee as to what qualifies as farm-based recreational activity in pinelands protection area is binding on Pinelands Commission

A-3850/S-2467 (DeAngelo, Eustace, Mazzeo, Pintor Marin, Benson/Turner, Singer) – Requires BPU to establish procedures allowing electric power and gas supplier customers to switch energy suppliers

Energy and Environment Bills  pocket vetoed

S-564/A-4186 (Smith, Bateman/Eustace, McKeon, Spencer, Benson) – Establishes “Solar Roof Installation Warranty Program” in EDA and transfers $2 million from societal benefits charge to initially fund program

S-1414/A-2405 (Smith, Bateman/Eustace, Benson, Johnson) – Concerns low emission and zero emission vehicles; establishes Clean Vehicle Task Force

SCS for S-1420/ACS for A-1603 (Beach, Whelan, Smith, Sweeney, Bateman, Thompson/Spencer, Eustace, Quijano, Wimberly) – Requires paint producers to implement or participate in paint stewardship program

S-2491/A-4069 (Smith/Danielsen, Pinkin, Benson) – Establishes position of State Oceanographer

S-2711/A-4128 (Smith, Whelan/Mazzeo, DeAngelo, Spencer, Singleton, McKeon, Danielsen, Johnson) –Permits BPU to approve qualified wind energy project; requires BPU to provide application periods for those projects

S-2769/AS for ACS for A-4197, 4206 (Smith, Bateman/Andrzejczak, McKeon, Spencer, Pintor Marin, Dancer, Vainieri Huttle) – Implements 2014 constitutional dedication of CBT revenues for certain environmental purposes; revises State’s open space, farmland, and historic preservation programs

S-3416/A-4808 (Lesniak, Sarlo/Eustace, Gusciora) – Prohibits possession, transport, import, export, processing, sale, or shipment of parts and products of certain animal species threatened with extinction

A-2586/S-1796 (DeAngelo, Quijano, Benson/Greenstein) – Establishes “Energy Infrastructure Study Commission”

A-4384/S-3145 (DeAngelo, Pintor Marin, Danielsen, Schaer, Johnson/Whelan) – Requires BPU to render decision on case within 12 months of final public hearing or hold another public hearing prior to deciding case

A-4763/SS for SCS for S-2973 (McKeon, Spencer, Pinkin/Smith, Bateman, Greenstein, Codey) – Revises “Electronic Waste Management Act”

A-4773/S-3146 (Eustace, Garcia, Gusciora/Lesniak) – Prohibits possession and transport of parts and products of certain animals at PANYNJ airports and port facilities


$305B Highway Bill Passes Senate

The U.S. Senate late Thursday passed a five-year, $305 billion surface transportation funding bill intended to improve surface transportation infrastructure and make several broad changes to transportation policy, as well as reauthorizing the U.S. Export-Import Bank and allowing for private tax enforcement.

Called the “The Fixing America’s Surface Transportation”, or “FAST, Act”, the legislation passed in a bipartisan 83-16 vote, after passing the House of Representatives earlier in the day, 359-65, and will now go to President Barack Obama to be signed into law. The bill authorizes and funds federal highway and other surface transportation programs through fiscal 2020, helping to provide both certainty and flexibility for state and local governments who rely on federal highway funding, while also working to streamline project approval processes and reform transportation programs, according to legislative statements.

The 1,300-page bill was unveiled Tuesday after a bicameral conference between Senate and House lawmakers, following each chamber’s putting forward a competing six-year bill. It is the first long-term highway bill to pass Congress since 2005.

Among other provisions, the bill expands the funding available for bridges off the National Highway System, eliminates or consolidates at least six offices within the U.S. Department of Transportation and encourages the installation of vehicle-to-infrastructure communication equipment to improve congestion and safety. It would also increase the National Highway Traffic Safety Administration civil penalties cap and makes changes to the auto safety recall process.

Public transit would get an 18 percent funding boost over five years, with dedicated bus funding increased even more. The bill also directs a review intended to help create federal minimum safety standards for public transportation and would make several changes to how Amtrak operates, for instance seeking to reorganize its operations around supporting its “major business lines” and giving states more control over routes through the creation of a State-Supported Route Committee.

It would also allow for the current $200 million liability cap on Amtrak incidents to be adjusted to account for inflation, as well as specifically lifting the cap to $295 million for claims stemming from the deadly May 12 derailment in Philadelphia that killed eight passengers and injured dozens more.

The bill further includes a clause reauthorizing the U.S. Export-Import Bank, that backs exports by U.S. businesses via loans and loan guarantees, through 2019. The bank’s charter had been allowed to lapse in June, amid opposition from several senior lawmakers, most prominently House Financial Services Committee Chairman Jeb Hensarling, R-Texas, whose committee is responsible for related legislation.

Opponents argue the bank is an exemplar of “crony capitalism,” but a bipartisan coalition supportive of the bank argues it helps support many domestic jobs and used the rarely-invoked procedural move of a so-called discharge petition to force a bill reauthorizing the bank onto the House floor in October.

To help pay for transportation programs, FAST  reauthorizes the federal gasoline tax through fiscal 2022, although keeps it at the existing 18.3 cents-per-gallon level, where it has remained since 1993. The tax typically brings in around $35 billion each year, but factors such as inflation, increasing fuel economy standards and a decrease in average miles driven each year mean this is not enough to fulfill yearly demand according to legislative history.

Thus, lawmakers have included several other offsets for the bill’s full $305 billion authorization, including an increase in aviation security fees that airline passengers pay, tightened enforcement on certain outstanding taxes — including a controversial provision to raise revenue by requiring the Internal Revenue Service to hire private collection agencies to recoup certain tax debts — and the sale of oil from the federal Strategic Petroleum Reserve.

A clause that has drawn criticism from the banking industry would limit the dividend banks with more than $10 billion in assets are paid on Federal Reserve stock. Banks currently receive a flat 6 percent on this stock, required to be purchased to participate in the Fed system, but would instead receive the lower of 6 percent or a rate equal to the high yield of the 10-year U.S. Treasury note at the most recent note auction. Smaller banks would continue to receive 6 percent.

New Jersey State Assembly members hear testimony on Horizon’s Omnia Alliance

New Jersey State Assembly members heard testimony today on Horizon’s Omnia Alliance and its controversial tiered healthcare plans that face legal challenges from an eleven-member coalition of hospitals who say they are being strong-armed into an unfavorable deal with Horizon Blue Cross. The mayors of Trenton (Eric Jackson) and Elizabeth (Chris Bollwage) criticized the provider at the joint hearing of the Assembly Health and Services and Regulatory Oversight Committees.

Critics say hospitals that did not agree to reimbursement rates favorable to Horizon in exchange for higher patient volume have been forced to charge high rates to disadvantaged customers as second-tier institutions, setting the stage for losses in inner-city areas as those hospitals decline or fail. Proponents cite a need for drastic cost reductions in New Jersey, and say Horizon is merely executing a strategy that many smaller providers have already put in place. Horizon insures nearly 50% of patients across New Jersey.

Representatives of Horizon and the acting DOBI Commissioner were not present at Wednesday’s hearing.

Jackson and Bollwage said that the new Omnia plans have already placed an undue burden on poor and inner-city communities.

“What damage has been done in the meantime?” asked Jackson. “Not only to the institutions, but how many lives have been impacted by individuals who not only have a $4,500 deductible but find out when they get to a tier two physician, or hospital, that their copays are more than double what they saw on that sheet?”

Jackson said that he was testifying in the interest of defending Trenton’s charity, faith-based and non-profit hospitals from unfavorable public perceptions as well as new fiscal challenges.

“We are a tier-one city all the way around,” he said.

“Healthcare hospitals are the economic engines for your communities, and sometimes even the largest employers next to the cities,” said Shavonda Sumter (D-35), of Paterson, thanking the mayors for bringing the economic impact of the tiered networks into the discussion.

Saying that the new plans were “designed to shift market share from disfavored tier-two hospitals to favored tier-one hospitals in a non-transparent and secretive manner,” former Department of Banking and Insurance Commissioner and attorney Steven Goldman painted the approval process from the New Jersey DOBI as too hasty.

“No input was sought from any of the tier-two hospitals that I represent,” Goldman said, adding that a thorough review would have taken months and not the two weeks Horizon waited before it received approval.

Health and Senior Services Chair Herb Conaway (D-7) agreed with the mayors’ testimony that many patients in low-income areas with a low density of tier-one hospitals would have to travel over an hour for care.

“It doesn’t really fully appreciate the transportation challenges that many people have,” said Conaway. “And we’re going to have to address that in regulations.”

Regulatory Oversight Chair Reed Gusciora (D-15) criticized the marketing push for the Omnia plans as obfuscating the cost and failing to address access, saying of Horizon’s materials “It doesn’t say ‘oh by the way, if you live in Trenton or Elizabeth don’t bother with these plans.”

At one point, Gusciora held up a spreadsheet detailing Horizon’s Omnia plan options for public workers, putting to Jackson and Bollwage that the second-tier providers have to levy exorbitant patient copays.

“One of them is the Horizon OMNIA, and it notes that it has the tier one and tier two program. If you choose a tier two hospital you have to pay a $4,500 copay. And I was wondering, how many of your constituents, per visit, can afford $4,500?” he asked Bollwage.

“I can’t,” Bollwage answered. “I’m a Horizon member and if you said to me I have to pay another $4,500, that’s going to take something out of the budget in my own household.”