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US Policy Scan 2017

January 3, 2017

Our government rests in public opinion. Whoever can change public opinion, can change the government, practically just so much. Abraham Lincoln — December 10, 1856 Table of contents

Washington overview 4 Homeland Security 52

2017 Congressional Calendar 7 Immigration 55

Senate outlook 10 International Relations 58

House overview 16 Supreme Court 61

Agriculture 18 Tax 65

Budget and Appropriations 21 Telecommunications 68

Canada-US cross border issues 26 Trade 71

Climate 29 Transportation and Infrastructure 74

Defense 32 Tribal Affairs 77

Education 35 2017 Dentons 50 State Policy 80

Energy 38 Freshman members of the 115th Congress 108

Federal Debt Limit 41 Dentons’ Public Policy and 118 Regulation Practice Financial Services and Banking 44

Health Care 49

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Washington overview

The 115th Congress kicks off on January 3 with Republicans in control of both the legislative and regulatory agenda in Washington -- at least as much as a party without the magical 60 votes in the Senate can be. What was unimaginable for GOP leaders on election day is now tantalizing close, but only if President-elect Trump and Congressional Republicans can get and stay on the same page.

Whether or not the new President and years was simply the Congressional authority available to them to Congressional Republicans will be Republican wish list is now squarely pursue their goals. Under Majority able to work together to implement within the realm of the possible. It Leader Mitch McConnell (R-KY), the most of their respective agendas, involves such issues as undoing much Senate is expected to use Budget there is no doubt that they share of Dodd-Frank; reversing the Obama Reconciliation, a parliamentary tactic a goal of reversing much of the administration’s climate change that only requires a simple majority work of the Obama administration. agenda; making fundamental changes in the Senate to end debate, as The current president’s legacy is in immigration policy designed to part of the effort to force the more surely under siege and it will be strengthen the border and curb illegal controversial measures through the illuminating and instructive to see immigration; moving away from Senate floor and to the President’s how hard Senate Minority Leader global trade deals and toward bilateral desk. Beginning within minutes of Chuck Schumer (D-NY) and other agreements; substantially increasing his January 20 inauguration, the Congressional Democrats will be defense spending while getting rid new tenant of the Oval Office also willing to work to protect the former of the sequester and ending the is expected to use his pen to undo president’s achievements. policy of parity between defense and Obama Administration Executive domestic discretionary spending Orders and force the review of To that end, January will be the start increases; reforming the tax code regulations the prior administration of a very busy first few months of the perhaps through a border adjustment put into law. new Congress as the Congressional tax, nominating conservative judges Republican agenda is loaded. It starts to serve on the Supreme Court The coin of the realm in Washington with repealing Obamacare, although and all across the Federal bench; remains floor time in the Senate. it’s not yet clear how long a transition and making profound changes to There is no more precious commodity period Republicans will propose. federal personnel practices, including to an Administration’s agenda. When It also remains to be determined withdrawing various protections from one reviews the President-elect’s whether or when Republicans will offer federal employees, to make it easier agenda, pairs it with the agenda a replacement alternative for those to fire or discipline those employees of the House and Senate leaders, who will lose insurance coverage whose performance is considered and adds into the mix the left-over when Obamacare is repealed. unacceptable or substandard. appropriations work from the 114th Congress that still must be addressed, Once Obamacare is addressed, the Republicans will use all the one quickly realizes that the 115th candidates for legislative action are parliamentary and executive Congress is setting up to be one virtually endless as what for many

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of the busiest in recent memory. beginning to see this in the debate on for when they stood for election. Notice we said busiest, we didn’t say surrounding the repeal of ObamaCare, We will likely see similar fissures productive, because the Democratic as GOP members in both chambers surrounding immigration reform, trade Senate Minority, particularly those begin to question the necessity policy and tax reform to name a few. Democratic Senators in states that for immediately repealing with no As is true in all things, the devils are in President-elect Trump carried and replacement bill ready for floor the details. who are up for reelection in 2018, will consideration. Moreover, if President have significant sway over how much Trump elects early in his term to offer We’ve added the chart below as a of this aggressive agenda finds its way anything that looks like the massive guidepost for what currently looks to to the president’s desk. infrastructure proposal he spoke of be in the realm of the possible for the during the presidential campaign, President-elect and his Republican It is also critical to consider that not we will see an early test of whether colleagues. We would suggest that all Republicans, and this is especially the conservative core of the House you “buckle up” as the rhetoric, pace true in the Senate, are necessarily in Republican conference view the and tweets coming out of Washington favor of the sweeping agenda the Trump spending proposals as a bridge are likely to be at break neck speed in President-elect proposes. We are too far and not what they signed the coming months.

Trump Campaign Promises Don’t need Congress Might need Congress Needs Congress Approve Keystone XL pipeline Stop funding for “santuctuary cities” Repeal and replace Obamacare Cancel payment on UN climate Renegotiate or withdraw from NAFTA Repeal Dodd Frank programs Choose Supreme Court Nominee Impose tarrifs on companies moving Build a wall overseas Act against foreign trade abuses Deport undocumented immigrants End Common Core who have commited crimes Freeze Federal hiring Pass a security bill Label China a currency manipulator Cut taxes Leave Trans-Pacific partnership Pass an infrastructure bill Limit federal regulations Pass an ethics bill Overturn protections for certain Restrict lobbying by former undocumented immigrants members of Congress Propose term limits for Congress Pass a child care bill Roll back environmental regulations Pass a law enforcement bill Suspend immigration from Confirm a new Justice (Senate only) “terror prone regions” Tighten lobbying restrictions on Term limits for Congress Executive Branch employees

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2017 congressional calendar

House and Senate scheduled to be in session Senate scheduled to be in session House scheduled to be in session

January February March

Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa

01 02 03 04 05 06 07 01 02 03 04 01 02 03 04

08 09 10 11 12 13 14 05 06 07 08 09 10 11 05 06 07 08 09 10 11

15 16 17 18 19 20 21 12 13 14 15 16 17 18 12 13 14 15 16 17 18

22 23 24 25 26 27 28 19 20 21 22 23 24 25 19 20 21 22 23 24 25

29 30 31 26 27 28 26 27 28 29 30 31

April May June

Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa

01 01 02 03 04 05 06 01 02 03

02 03 04 05 06 07 08 07 08 09 10 11 12 13 04 05 06 07 08 09 10

09 10 11 12 13 14 15 14 15 16 17 18 19 20 11 12 13 14 15 16 17

16 17 18 19 20 21 22 21 22 23 24 25 26 27 18 19 20 21 22 23 24

23/30 24 25 26 27 28 29 28 29 30 31 25 26 27 28 29 30

July August September

Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa

01 01 02 03 04 05 01 02

02 03 04 05 06 07 08 06 07 08 09 10 11 12 03 04 05 06 07 08 09

09 10 11 12 13 14 15 13 14 15 16 17 18 19 10 11 12 13 14 15 16

16 17 18 19 20 21 22 20 21 22 23 24 25 26 17 18 19 20 21 22 23

23/30 24/31 25 26 27 28 29 27 28 29 30 31 24 25 26 27 28 29 30

October November December

Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa

01 02 03 04 05 06 07 01 02 03 04 01 02

08 09 10 11 12 13 14 05 06 07 08 09 10 11 03 04 05 06 07 08 09

15 16 17 18 19 20 21 12 13 14 15 16 17 18 10 11 12 13 14 15 16

22 23 24 25 26 27 28 19 20 21 22 23 24 25 17 18 19 20 21 22 23

29 30 31 26 27 28 29 30 24/31 25 26 27 28 29 30

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2017 Legislative and Regulatory Calendar

Legislative Regulatory Other

January February March

Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa

01 02 03 04 05 06 07 01 02 03 04 01 02 03 04

08 09 10 11 12 13 14 05 06 07 08 09 10 11 05 06 07 08 09 10 11

15 16 17 18 19 20 21 12 13 14 15 16 17 18 12 13 14 15 16 17 18

22 23 24 25 26 27 28 19 20 21 22 23 24 25 19 20 21 22 23 24 25

29 30 31 26 27 28 26 27 28 29 30 31

April May June

Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa

01 01 02 03 04 05 06 01 02 03

02 03 04 05 06 07 08 07 08 09 10 11 12 13 04 05 06 07 08 09 10

09 10 11 12 13 14 15 14 15 16 17 18 19 20 11 12 13 14 15 16 17

16 17 18 19 20 21 22 21 22 23 24 25 26 27 18 19 20 21 22 23 24

23/30 24 25 26 27 28 29 28 29 30 31 25 26 27 28 29 30

July August September

Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa

01 01 02 03 04 05 01 02

02 03 04 05 06 07 08 06 07 08 09 10 11 12 03 04 05 06 07 08 09

09 10 11 12 13 14 15 13 14 15 16 17 18 19 10 11 12 13 14 15 16

16 17 18 19 20 21 22 20 21 22 23 24 25 26 17 18 19 20 21 22 23

23/30 24/31 25 26 27 28 29 27 28 29 30 31 24 25 26 27 28 29 30

October November December

Su M Tu W Th F Sa Su M Tu W Th F Sa Su M Tu W Th F Sa

01 02 03 04 05 06 07 01 02 03 04 01 02

08 09 10 11 12 13 14 05 06 07 08 09 10 11 03 04 05 06 07 08 09

15 16 17 18 19 20 21 12 13 14 15 16 17 18 10 11 12 13 14 15 16

22 23 24 25 26 27 28 19 20 21 22 23 24 25 17 18 19 20 21 22 23

29 30 31 26 27 28 29 30 24/31 25 26 27 28 29 30

Jan. 1: SEC requires companies to provide April 28: Fiscal Year 2017 stopgap July 30: Proposed date for compliance to disclosure of their pay ratios in funding expires EPA’s Clear Air Act plans if applied for 1 accordance with Dodd-Frank April 30: Trump’s 100th day in office year extension (approximate date) Jan. 3: Congress enters 2016 session March 15: Current debt limit deal expires July 31: August Congressional Jan 9: Supreme Court session begins May 15: Annual appropriation bills may be recess begins Jan 20: Inauguration of President Trump considered in the House Sep. 5: Congress returns from Jan. 10: DHS deadline for Real ID May 17: FDA requirement for cigar package August recess Act compliance and ad warnings kicks in Sep. 6: EPA deadline for states to submit Jan. 31: ACA Open Enrollment Period ends June 10: House Appropriations Committee Clean Power Plan compliance plans Feb. 6: President’s Budget Request reports last annual appropriations bill Sep. 30: Children’s Health Insurance (approximate date) June 15: Congress completes action on Program funding expires April 1: Senate Budget Committee reports reconciliation legislation Sep. 30: Federal Aviation Administration concurrent resolution on the budget June 30: House completes action on authorization expires April 10: Department of Labor final annual appropriation bills Oct. 1: Fiscal Year 2018 begins (deadline fiduciary rule initial compliance required July 21: US banking organizations must for appropriations) April 15: Congress completes action on the fully comply with final interagency liquidity Dec. 18: Congress ends 2016 session concurrent resolution on the budget ratio (LCR) rule

dentons.com 7 Need these dates in outlook? Download the entire 2017 US Policy Scan congressional and key dates directly into your Microsoft Outlook calendar. Visit www.dentons.com/en/policyscancalendar

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Senate outlook

By maintaining control of the Senate, Republicans start 2017 with a jam-packed agenda. First up will be Senate confirmation of presidential appointments, and with only 50 votes needed the Senate is poised to process as many nominations as quickly as possible. This will ensure the new administration has as many Senate-confirmed cabinet secretaries as possible soon after President Trump is sworn in on January 20. To accomplish this, the Senate will be in session all of January except for Martin Luther King Jr.’s birthday, a federal holiday. The current plan is to hold hearings for the national security cabinet positions the week of January 9 so that their confirmation votes can take place as soon President-elect Trump is inaugurated.

Besides processing nominees, the Once the ACA reconciliation process reform requiring only a simple majority Senate in January is also plainning is complete—most likely within the first vote. Some proponents on Capitol Hill to move quickly on a process that couple of months of 2017—the Senate think there is a chance tax reform can will allow it to repeal parts of the will then turn to completing the FY 2017 be paired with the transportation and ACA with only a simple majority of appropriations process, raising the infrastructure package President-elect votes. This process, known as budget debt ceiling and, once President-elect Trump discussed on the campaign trail, reconciliation, allows expedited Trump has submitted the first budget but will keep reconciliation in their back consideration of legislation that of his administration, processing a pocket if they cannot get Democrats has a direct budgetary impact. The budget resolution for FY 2018. The to help them get over the 60 vote Republican Senate Leadership has Republican leadership has publicly filibuster threshold. publicly committed that it will begin stated that it will look toward the 2018 this process right away—as soon as the budget process to include another new Congress arrives in Washington— set of reconciliation instructions that by passing a budget resolution for the would again allow use of the expedited current (2017) fiscal year. process to pass comprehensive tax

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Senate confirmation of President Trump’s nominees Given the makeup of the US Senate, recent Senate rules changes, and the initial reactions of Democratic senators to President-elect Trump’s cabinet picks, the confirmation process will be tumultuous, but will likely lead to confirmation of almost all, if not all, of the President-elect’s cabinet and top level selections. The only likely scenario in which a nomination might fail is if three Republican senators were to oppose the nominee, assuming that Democrats, who control 48 votes, will likely oppose, en bloc, all controversial nominations.

Traditionally, US presidents have had almost all of their nominees to top posts confirmed by the Senate, with a few rare exceptions, usually when the nominee has withdrawn from the process after intense scrutiny of his or her background. Recent examples include President Obama’s HHS nominee, former Senator Tom Daschle, and President Bush’s customary power to “put a hold on” In an attempt to put an end to this selection of former New York City sub-cabinet nominees for an unlimited abuse, the Senate in 2011 voted 92 to Police Commissioner Bernard Kerik to period of time. According to tradition, 4 to require that a senator make his or succeed Tom Ridge as Secretary of the holding senator does not have to her hold public after two days on the Homeland Security. reveal his or her identity, which has theory that exposing senators who contributed to the perpetuation of were continuing to hold nominees Throughout most of the Senate’s this tactic. would result in their colleagues history, nominees have typically been using leverage on them to allow the confirmed without much controversy Prior to the 1990s, these holds were nominations to come to a vote on the or delay. However, in the past 25 only used to delay a floor vote on a Senate floor. However, this has not years, the process has become more nominee when a senator had further proven to be effective, as the process and more contentious, with some questions for the nominee and allowed the leaders of both parties nominees having had to wait weeks or needed more time to make a decision to take responsibility for the holds on even months for confirmation. about how to vote; the duration of behalf of other senators, who could such holds ranging from a few days to remain anonymous. Since the 1990s, Senate leaders on a few weeks. But since the 1990s, the both sides of the aisle have had to duration of these holds has become Finally, in November 2013, after years vote to break filibusters on nominees longer and longer, with senators of frustrating holds and filibusters on for high ranking positions, which often using them to stop a nominee cabinet and sub-cabinet nominees requires 60 votes to end the debate from ever being considered rather and judicial nominations, Majority and allow a majority only vote. On than simply to allow more time for Leader Harry Reid (D-NV) set up top of this, senators have used their questions, research or debate. a process to change the Senate

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rules to allow these nominees (with will almost certainly be able to muster Somewhat controversial nominations the exception of Supreme Court 50 votes for each nominee but the • Treasury Secretary: Steven Mnuchin nominees) to be confirmed with only Democrats may use up to 30 hours of 50 votes to defeat a filibuster, instead debate before the final vote occurs. • Energy Secretary: Former Governor of the 60 required under the existing Rick Perry Senate Rules. This change was made This can slow down the process for through a parliamentary maneuver the controversial nominees but, as • HUD Secretary: Dr. Ben Carson not through the regular order, which long as there is Republican unity, drew vociferous protests from cannot be used to stop them from Contentious nominations Republican senators, who were then in being confirmed. • EPA Administrator: Oklahoma the minority. Attorney General Scott Pruitt Non-controversial nominations Three senators voted against this • Transportation Secretary: • Education Secretary: Betsy DeVos parliamentary change and warned Elaine Chao • HHS Secretary: Congressman that it could come back to haunt the Tom Price Democrats when they returned to • Commerce Secretary: Wilbur Ross the minority. • Interior Secretary: Congressman • Labor Secretary: Andrew Puzder Now, the Democrat minority does not Ryan Zinke • Attorney General: have the ability to deny a vote to any Senator Jeff Sessions Trump nominee. The only tool of delay • UN Ambassador: Governor Nikki Haley the Democrats will have beginning in • US Ambassador to Israel: January is to force a seperate vote to • Defense Secretary: General (Rt.) David Friedman end the filibuster on every individual James Mattis nominee. The Republican majority • Secretary of State: Rex Tillerson

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Trump Administration

Cabinet

State Justice Defense Treasury Homeland Security Education Enery

Rex Tillerson Jeff Sessions James Mattis Steven Mnuchin John F. Kelly Betsy DeVos Rick Perry

Transportation Labor Commerce HHS HUD Agriculture Veterans

Elaine Chao Andrew Puzder Wilbur Ross Tom Price Ben Carson Open Open

Interior OMB Director Chief of staff Ambassador to EPA Administrator Administrator National Economic the U.N. of the SBA Council Director

Ryan Zinke Mick Mulvaney Reince Priebus Nikki Haley Scott Pruitt Linda McMahon Gary Cohn

White House

Chief Strategist National Security White House Counsel Press secretary Deputy National Director of National CIA Director Advisor Security Advisor Intelligence

Stephen Bannon Michael Flynn Donald McGahn Sean Spicer Kathleen Troia Open Mike Pompeo “KT” McFarland

Senior advisor to the Counselor to president for policy the President

Stephen Miller Kellyanne Conway

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Senators up for election in 2018 State Senator Party Electoral history Arizona Jeff Flake (R) 2012 California Dianne Feinstein (D) 1992 (Special) ,1994, 2000, 2006, 2012 Enery Connecticut Chris Murphy (D) 2012 Delaware Tom Carper (D) 2000, 2006, 2012 Florida Bill Nelson (D) 2000, 2006, 2012 Hawaii Mazie Hirono (D) 2012 Indiana Joe Donnelly (D) 2012 Maine Angus King (I) 2012 Maryland Ben Cardin (D) 2006, 2012 Massachusetts Elizabeth Warren (D) 2012 Michigan Debbie Stabenow (D) 2000, 2006, 2012 Minnesota Amy Klobuchar (D) 2006, 2012 Mississippi Roger Wicker (R) 2007 (Appointed), 2008 (Special), 2012 Missouri Claire McCaskill (D) 2006. 2012 Montana Jon Tester (D) 2006, 2012 Nebraska Deb Fischer (R) 2012 Nevada Dean Heller (R) 2011 (Appointed), 2012 New Jersey Bob Menendez (D) 2006 (Appointed), 2006, 2012 New Mexico Martin Heinrich (D) 2012 New York Kirsten Gillibrand (D) 2009 (Appointed), 2010 (Special), 2012 North Dakota Heidi Heitkamp (D) 2012 Ohio Sherrod Brown (D) 2006, 2012 Pennsylvania Bob Casey, Jr. (D) 2006, 2012 Rhode Island Sheldon Whitehouse (D) 2006, 2012 Tennessee Bob Corker (R) 2006, 2012 Texas Ted Cruz (R) 2012 Utah Orrin Hatch (R) 1976, 1982, 1988, 1994, 2000, 2006, 2012 Vermont Bernie Sanders (I) 2006, 2012 Virginia Tim Kaine (D) 2012 Washington Maria Cantwell (D) 2000, 2006, 2012 West Virginia Joe Manchin (D) 2010 (Special), 2012 Wisconsin Tammy Baldwin (D) 2012 Wyoming John Barrasso (R) 2007 (Appointed), 2008 (Special), 2012

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House overview The official start of the 115th Congress is noon on January 3, 2017. Paul Ryan is expected to easily be elected Speaker, marking his second term (although first full term) leading that chamber, and continuing his role as No. 3 in the presidential line of succession.

In the opening week of session, rest of January, House committees The Senate will likely work on its own the House will need to consider a will perform the tasks necessary to blueprint simultaneously with the rules package clarifying process report Obamacare-repeal language House’s efforts and the joined product issues that will affect the coming to the Budget Committee, which will could end up being passed in the year. These include the speed with package the language and send it to Senate via reconciliation, avoiding the which a budget resolution can be the House floor, likely in early February. 60-vote threshold. considered without an organized Once passed through the House, committee and whether there will be the bill will reach the Senate, which CRA rule rollbacks: Leadership an automatic increase in the federal will now need only a simple majority in both bodies are certain to make debt limit following the passage of for passage. floor time available in January and a budget resolution (known as the February for using the Congressional “Gephardt Rule”). If all goes according to plan, the bill Review Act to rollback various Obama can be on President Trump’s desk for administration-ordered regulations. The month of January will be all about signing before the end of February. Once Donald Trump is sworn in, the logistical planning for the coming year That said, there have been ongoing Congress will engage with the relevant and it is therefore unlikely that very discussions regarding how quickly this departments and agencies to achieve much legislative activity will occur process really needs to be done and the rollbacks. until February. even whether it could be stretched out until late spring or summer. Other early-docket items: Additional Obamacare relief: Both Speaker Ryan and Senator Majority congressional priorities include congressional bodies will be focused Leader Mitch McConnell have not yet appropriations (currently funded on repealing the Affordable Care Act publicly stated whether it will go to the via a CR until 4/28), Dodd/Frank (ACA or Obamacare.). The Senate, for President later than February. repeal consideration, targeted its part, will need to begin the budget immigration enforcement funding resolution process for FY 2017 such Tax reform: As far as tax reform is (broader legislation is not likely to be that repeal can be accomplished concerned, the House will follow implemented in as swift a fashion), through a reconciliation bill. This will the Ways and Means Committee’s nominations (both executive and include 50 hours of debate in the blueprint, “Better Way for Tax Reform,” judicial, including Supreme Court) Senate to be followed by “vote-a- which it unveiled in June 2016. and, potentially, something in the rama” voting, probably as early as the However, with the focus on ACA infrastructure arena, although the week of January 9. repeal taking up most of the oxygen in specifics of how the infrastructure Congress early on, tax reform may not piece will come to fruition is still Once the Senate has that completed, be attacked in earnest until later in the being discussed. the House will aim to pass its FY 2017 year (possibly summer). budget by January 13. Throughout the

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Mark your calendars: • The House Republican Elected • Republican members of • The House is expected to populate Leadership Retreat (for members the House and Senate will their committees during the weeks who sit at the Leadership table) will be hold their joint retreat on beginning January 2 and January 9. January 8 and 9. January 25-27 in Philadelphia.

• The Inauguration of Donald Trump

will be January 20.

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Agriculture

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Agriculture policy in the 115th Congress will be driven by the rewrite of the Farm Bill, which has traditionally been rewritten every five years. The last Farm Bill was approved in early 2014 (almost two years late) and goes through the end of 2018. It is the goal of the House and Senate Agriculture Committees to complete the next Farm Bill rewrite by the summer of 2018, before the midterm elections take control of members’ schedules. Hearings on the Farm Bill will begin early in 2017 and run through at least the summer.

Experienced hands will be at the helm nutrition programs administered by groups is how to support and sustain of the House and Senate Committees, USDA with the traditional commodity young farmers for the next generation with Chairman Mike Conway (R-TX) support programs in order to of American agricultural production. In returning as House chairman and encourage urban/suburban members addition, the challenge of increasingly Senator Pat Roberts (R-KS) returning to support the Farm Bill. Initially, the scarce water supplies for agricultural as Senate chairman. Both have been House Agriculture Committee voted to production will never be far from the through the complicated balancing strip the nutrition programs from the Farm Bill debate. act presented by developing a bill Farm Bill, but then later recognizing that can gain the support of rural the political reality that a Farm Bill Numerous interests groups in agricultural legislators and urban needed the votes of non-farm country Washington—the American members of Congress whose members, added back the SNAP and Farm Bureau, National Farmers constituencies rely on the USDA other nutrition programs to the final Union the Forest in the Farm Bill nutrition programs that have been bill. This Farm Bill will once again be Coalition, research universities, included in past Farm Bills. The 2014 challenged by budget hawks in the specific commodity organizations, Farm Bill was delayed for many House and Senate regarding the cost environmental and conservation months in 2012 and 2013 in part due of the commodity programs and organizations, and organizations to the efforts of many conservative the crop insurance programs. Other supportive of expanded nutrition members of the House to decouple programs, such as the dairy program programs, among others—are reauthorization of the SNAP (food and conservation programs, will also all gearing up to offer legislative stamps) and other nutrition programs be the target of much debate and proposals and to strengthen their from the agricultural commodity differing opinions. lobbying capabilities during the Farm programs, crop insurance and Bill process. conservation programs. One area of mostly common agreement is the importance of Trade Decades ago, farm state members providing continued strong support Debate about international trade and of Congress and the leadership of for USDA programs that support the Trump administration’s position the House Committee on Agriculture agricultural and natural resource on trade agreements will have a major and the Senate Agriculture, Nutrition research at America’s major public impact on American agriculture, and Forestry Committee recognized research universities. Another topic one of America’s biggest export the strategic importance of binding on the minds of many agricultural sectors. The agricultural community

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has generally supported free trade interaction between American of policies he is likely to propose for because of America’s big trade businesses and the Cuban economy the Farm Bill. He also left the nominee advantage on agricultural products. In for many years. As a result, Cuba has for Agriculture Secretary to the very December, the Obama administration become a major market for American end of his Cabinet selection process. brought action under existing trade agriculture products. With Obama His “landing team” at the USDA agreements against China, alleging having moved the US to a more consisted, for much of December, that China has unfairly limited access normalized relationship with Cuba of one person; his landing teams at for US wheat, corn and rice. The action generally, the Trump administration other agencies were much larger, was applauded by both Republicans must decide how it wants to deal with including some with more than a and Democrats as a important step Cuba in the years ahead. dozen members. The members of toward a tougher US trade posture his campaign Agriculture Advisory toward China. The Trump transition Trump on agriculture Committee who have spoken publicly team has clearly signaled its intention During his campaign, President-elect since the election have emphasized to follow through on the President- Trump had an agricultural advisory that Mr. Trump must pay attention to elect’s campaign rhetoric against the committee boasting a long list of the needs of rural voters in his early Chinese once he is in office. names, but he himself had very little to policy initiatives because of the large say during the campaign regarding his margins they delivered for him in key Agricultural trade with Cuba has been views on agriculture in America. Little swing states, making possible his one of the few areas of approved is known, for example, about the type surprising electoral college victory.

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Budget and Appropriations

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Budget reconciliation primer: A fast-track process (50, not 60, votes required) for changing tax and spending policies.

Lawmakers, administration officials, journalists and much of official Washington will begin using the term “budget reconciliation” over and over during the first few days of the 115th Congress—and will probably continue doing so until the last days of 2017.

Congress established the “budget reconciliation” process, often shortened to simply “reconciliation,” in the 1974 Congressional Budget and • The bill would (typically) include budgeting, i.e., a provision that is not Impoundment Act. The new law set up provisions from several different about spending (outlays) or taxing a fast-track budget process designed Congressional committees with (revenues) or is “merely incidental” to come at the end of the calendar jurisdiction over mandatory to budgeting. If a provision violates the year to allow Congress to better meet spending, fee collection and taxes. Byrd rule, it can be removed on Senate its budget targets. The law envisioned (In the House, much of the deficit floor unless 60 Senators vote to keep it. the following: reduction has taken place in the Ways and Means and Energy and Then there is the Senate parliamentary • The House and Senate would pass Commerce Committees; in the rule that reconciliation bills do a budget resolution, not a law, Senate, the Finance Committee not have to reduce the deficit at that would set top-line spending has been the lead deficit reduction all. The so-called Bush tax cuts in and deficit targets for the fiscal committee in this process.) 2001 increased the deficit but were year beginning on October 1. considered under the fast-track After Congress completed its President Carter signed the first reconciliation process. Congress, appropriations process and any reconciliation bill in 1980. Since however, provided a sunset for these mandatory and tax legislation, then, Congress has tweaked the law, tax cuts after 10 years the Congressional Budget Office legislating changes designed to force Basically, the reconciliation process (CBO) would provide updated Congress to make tough decisions is now used to implement a budget, spending and deficit data for the on meeting the deficit targets, spending and tax deal supported by second time in the year, typically in although such changes have been the Congressional majority leadership. September, with the first being at largely unsuccessful. the beginning of the calendar year. Application of the baroque President-elect Trump and the Republican majority in Congress will • If the CBO stated that the parliamentary rules governing now be able to use this process to budget deficit targets were the reconciliation process has repeal or change the Affordable Care below what Congress set as a changed since the 1980s, and new Act, cut taxes, increase infrastructure goal in the budget resolution, parliamentary rules have been spending and, potentially, increase Congressional leaders could use a adopted, most notably the so-called tariffs outside the normal legislative fast-track legislative process (i.e., “Byrd Rule,” designed to ensure that rules of Congress. reconciliation), to cut spending the reconciliation process remains and raise taxes in order to meet the focused on budgetary by providing In practical terms, this process only deficit targets set earlier in the year. a point of order against material defined to be “extraneous” to alters the way the Senate considers

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reconciliation legislation; the House If amendments do not meet this • They can offer dozens of can pass any legislation with a standard, 60 votes will be needed amendments to the budget majority vote, regardless of whether it to pass them. In other words, if resolution, which creates the is in reconciliation form or not. the first reconciliation bill does reconciliation process, and to the not contain provisions changing actual reconciliation bills themselves. The 2017 reconciliation process Medicare, any amendment offered Some of these could be substantive allows the Senate majority to do by a Democrat on Medicare would and bipartisan but most will likely be the following: need 60 votes to pass. designed to force Republicans to vote against something popular in • Pass legislation changing • Prevent a filibuster of any the ACA or in the tax code. mandatory spending, fees and part of the reconciliation taxes with only 50 votes in the process, including procedural • They can try to knock out Senate, not the 60 typically required votes like motion to proceed, extraneous provisions in the for all other legislation. This means appointing conferees, going to reconciliation bills that do not that the Senate leadership does not conference, etc. “score” and thus are Byrd Rule need the votes of any Democrats violations. If they find Byrd Rule to pass this legislation and they can House Democrats have no power to violations, and the Parliamentarian even lose two GOP votes and still stop the reconciliation process—and agrees, they can strike them from be successful. can’t even do much legislatively to the bill unless the GOP can muster protest it. 60 votes to overcome the violation. • Divide up spending and tax legislation into more than one Senate Democrats have limited • They can also obstruct and delay reconciliation bill, allowing Congress powers to delay the Senate and offer other legislation, nominations, to consider unrelated measures politically difficult amendments for committee meetings and separately, to avoid loading up the majority to be forced to vote committee hearings. This can disparate legislation (e.g., health against, but in the end, without three cause the Senate GOP leadership care, taxes, infrastructure spending, Republican defections during part of headaches and scheduling etc.) into one massive omnibus this process, the congressional GOP problems, but cannot stop the leadership should be able to enact its inevitable, a reconciliation bill that • package, something that many agenda on spending and taxes. 50 GOP senators support. House Republicans have protested in the past. The Senate Democrats have the So when it comes to budget and following limited power: taxes, the majority will rule without the • Limit Democratic amendments to threat of a filibuster. strictly “germane” amendments.

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Appropriations

Late in the evening on December 9, 2016, shortly before funding for the federal government’s operations expired, the Senate, by a vote of 63- 36, avoided a government shutdown for another four and one-half months, passing a continuing resolution (CR) essentially extending federal discretionary spending at current rates, with only a few noteworthy “anomaly” exceptions, through April 28, 2017. (President Obama signed this CR immediately upon receipt, early in the morning of December 10.) Simply put, to the regret, but not the surprise, of many, particularly those members of the House and Senate who serve on the Appropriations Committees, the 114th Congress punted on the FY 2017 appropriations process.

In the period immediately following the November elections, Congressional Republicans permitted under the current budget individual appropriations bills abandoned their long-stated law and a level very close to the FY because they believe a CR deprives intention to pass all of the FY 2017 2016 spending rate. Passage of the it of the ability to plan and budget appropriations bills before adjourning CR followed Congress’s failure to appropriately and make programmatic for the year and instead opted to pass and send to President Obama changes as necessary to respond honor the request of the Trump any spending bills for FY 2017, to circumstances on the ground. As transition team that all major spending which began on October 1, 2016, an Defense Secretary Ashton Carter decisions be delayed until after the outcome that disappointed most of complained in a recent letter to the President-elect takes office. They the members of both the House and Congressional leadership, a CR means took this step so that Mr. Trump and Senate Appropriations Committees that the DoD is “locked into last year’s his incoming administration would who seek a return to regular order budget with last year’s priorities.” have the chance to establish and where the Congress would pass many, implement his own spending and if not all, of the appropriations bills on But the challenges posed by a CR budgeting priorities for 2017 rather an individual basis. are not limited to the DoD. Leaders than be locked in to the priorities of all federal departments and of President Obama and the While the CR includes certain agencies will be barred from starting 114th Congress. supplemental funding to support new programs or stopping old ones the operations of the Department of and from implementing funding The CR sets federal discretionary Defense, many in the DoD leadership increases or decreases included spending at an annual rate of $1.07 are sharply critical of Congress’s in the various appropriations bills trillion, the maximum funding level failure to pass and send the President that were passed by the House or

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Senate Appropriations Committees, administration will face a very full hand, a case can be made that the respectively, but never became policy agenda when the new Congress path to passing appropriation bills in law. Until the Congress passes, and convenes on January 3, 2017. the Senate has actually gotten more the President signs, the FY 2017 difficult as a result of the election. appropriations bills, funding changes In addition to pursuing the Trump and program guidance included in administration’s policy agenda for Given this reality and the challenges the House and Senate versions of the the first 100 days, the next Congress of finding the necessary floor time for various bills, even if overwhelmingly will have to finish the FY 2017 the Senate to consider appropriations supported by the members of House appropriations process and develop bills, a real possibility already exists and Senate, will not have the force of and pass a FY 2017 budget resolution; that the new Congress will be unable law and cannot be implemented. then develop and pass a fiscal year to devote the floor time necessary 2018 budget resolution; and then to pass and send the President Thus, even if the next Congress consider, pass and send to President individual appropriations bills before does eventually pass some FY 2017 Trump, by October 1, 2017, when FY the current fiscal year concludes on appropriations legislation, 2017 funding 2018 begins, each of the 12 FY 2018 September 30, 2017. As a result, while outcomes will now most likely not individual appropriations bills—truly Congressional Republican leaders be known until April 2017, more than daunting tasks for a new president and continue to express optimism about half way through the current fiscal for any Congress. the prospects for the budget and year. In addition, with Congressional appropriations process in 2017, several Republicans and President-elect Trump Senate Majority Leader Mitch prominent Congressional Republican pledging to use the reconciliation McConnell and House Speaker Paul appropriators have already suggested process immediately after Mr. Ryan each have repeatedly spoken that the enactment of individual FY Trump’s inauguration to repeal the favorably of a return to regular order 2017 appropriations bills remains Affordable Care Act and to promptly that involves passing and sending highly unlikely and that passage of thereafter pursue adoption of a FY individual appropriations bills to the a long-term CR to fund the federal 2018 budget resolution to fast track President. Yet with Democrats having government’s operations could be on the process for pursuing tax reform, picked up two Senate seats in the the horizon in late April 2017 when the the 115th Congress and the new Trump most recent election and no crisis at current CR expires.

dentons.com 25 Canada-US cross border issues

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As the largest commercial partner of the US with about $700 billion in annual 2 way trade, Canada merits special attention. In addition to the $1.6 million in commerce every minute, 400,000 border crossings occur every day. What are the threats and opportunities for Canada/ US business in 2017 from a policy point of view?

Even though anti-trade rhetoric In the upcoming 115th Congressional abroad would not be deductible. All marked the US election campaign, session, much of the trade policy transactions would be ignored for 2016 was a year of landmark trade question will be considered in the tax purposes except those occurring deals moving forward involving context of comprehensive tax and exclusively within the United States. multiple countries. The World Trade immigration reform. Of immediate Because the United States has a large Organization’s Trade Facilitation interest to Canada are proposals related current account deficit with its imports Agreement brought together more to border tax adjustments (BTAs). considerably exceeding its exports, than 100 countries to make trade taxing spending on imports rather than between them easier, and more than Rather than continuing the United taxing sales of exports is estimated 50 countries agreed to expand the States’ efforts to collect corporate by the Tax Foundation to raise about Information Technology Agreement to taxes based on where a corporation’s $1 trillion in additional federal revenue eliminate duties on $1.3 billion worth profits are earned, a BTA approach over a decade. of goods. And while President-elect would not include sales abroad in Trump has indicated that the US will determining corporate revenue for A crucial question remains whether a not participate in the Trans-Pacific tax purposes, nor would purchases destination-based tax of this sort would Partnership, 11 other nations agreed to or investments made abroad be be deemed to be compliant with the a deal that would involve 40% of the deductible. Instead, taxes would be rules of the World Trade Organization, as world’s economy. This may present an destination-based; levied on where a it is uncertain whether such a law would opportunity for Canadian interests. company’s products are used rather be characterized as an indirect tax on than where they are produced or transactions as permitted by the WTO A more immediate question for where the company is located. rules or as a direct tax on businesses, Canadian business is what will become which is prohibited by the WTO rules. of the NAFTA agreement, and will it be A BTA is defined as a tax to which overtaken by “Buy American” provisions domestically produced goods and The political landscape in which this that, unlike the Recovery Act of 2009, imports are subject but from which proposed change may be considered do not consider Canadian inputs to be exports are exempt. BTAs may be is somewhat challenging. There is a “American” for the purposes of “Buy implemented either as taxes on significant split among congressional American.” Fortunately for Canadian imports and rebates on exports or Republicans as to the wisdom and interests, a number of leading by excluding overseas sales and merits of this proposed approach, Congressional voices on international purchases from the computation of especially among conservatives, trade, such as House Ways and Means taxable income. who announced their opposition to Committee Chairman Kevin Brady and BTA legislation, arguing that it would Senate Finance Committee Chairman All taxes on foreign-source income lead to higher prices for consumers Orrin Hatch, have urged lawmakers to would be eliminated and all cross- and ultimately be “devastating” to fix trade deals rather than abandoning border transactions would also be the economy. them altogether. excluded. Sales abroad would not be included in receipts, and purchases

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Many companies that rely on imports, Highway Administration (FHWA), iron, steel and manufactured goods such as discount retailers like Wal- Federal Railroad Administration used in the project were produced Mart and Target, are concerned that (FRA) High Speed Rail program, in the United States. (If procurement the proposal will drive up their taxes the National Railroad Passenger of subcomponents or earlier and force them to increase prices. Corporation (AMTRAK) and the processing occurred in another Federal Transit Administration (FTA) country, a product nonetheless can The border adjustment tariff proposal each have varying requirements be considered to be manufactured in should be viewed in the context to ensure that steel, iron and/or the United States if it is “substantially of historical domestic preference manufactured products used in altered” during a process in the laws. Since passage of the Buy every project are produced in the United States.) Several commentators American Act of 1933, virtually every United States. These agencies also say that this legislation had the effect Congress has enacted various forms can only buy raw materials that are of disrupting supply chains because of domestic-preference legislation, mined or produced domestically it excluded Canadian and Mexican designed to give a preference and manufactured goods that are sources of goods, an impact that to domestic goods in federal made from goods that are mined or led many Canadian companies to procurement. Such legislation, which produced domestically. call for retaliation by the Canadian generally requires that between 50 government. (See also the Berry percent and 100 percent of materials Similarly, the 2009 economic Amendment, which requires that be domestically produced, can stimulus bill, the American Recovery food, clothing, tents, certain textile increase the price that the federal and Reinvestment Act (ARRA), fabrics and fibers, and measuring government pays for goods, thereby provided that funds from ARRA tools purchased by the Department reducing the impact and reach of could only be used for construction, of Defense (DoD) be entirely grown, federal expenditures and increasing alteration, maintenance or repair reprocessed, reused or produced the federal deficit. of public works in which all of the within the United States.)

That said, there are significant exemptions for trade agreements that protect many countries from having to comply with the Buy American Act’s requirements for contracts above a particular threshold and that permit products from such exempt countries to be treated the same as domestic goods for federal procurement purposes. Moreover, a foreign product may be purchased if the domestic alternative is “unreasonably costly” or not available domestically in sufficient quality and quantity.

There are five Buy American Acts that are applicable only to the Department of Transportation (DOT). These acts generally apply to federal government agency grants rather than to direct spending. See, e.g., The Surface Transportation Assistance Act of 1982 (H.R. 6211, the 97th Congress). The Federal Aviation Administration (FAA), Federal

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Climate

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The biggest climate change policy question ahead is what path forward President-elect Trump will take to reverse course on the Obama Climate Change Action Plan and, in particular, its key element, the EPA Clean Power Plan (CPP), developed under the Clean Air Act. Likewise, the new administration will decide whether to keep the United States in the Paris Agreement already signed by 197 countries including the US. Reversing course at the EPA while also staying within the Paris Agreement would be a challenging line for President Trump to walk.

Reversing course on the Clean and protracted battle. The CPP was to the Supreme Court, but the states Power Plan published in the Federal Register and non-governmental organizations President-elect Trump nominated in 2015; therefore, the timespan for (NGOs) that intervened on behalf of Oklahoma Attorney General Greg Congress to consider Congressional the EPA could very well appeal. If the Pruitt to be the new administrator Review Act disapproval resolutions has DC Circuit does not issue a decision of the Environmental Protection passed and the new administration prior to Mr. Trump taking office, his Agency. Pruitt would bring to the EPA and Congress will have to use other administration could withdraw the a well-known federalist perspective means to block it. The CPP is also government’s support for the CPP, on the law. With respect to the CPP, subject to litigation, adding another though, as noted above, states and he has made his views clear: “What layer of complexity to efforts to roll NGOs would continue their advocacy concerns the states is the process, the back the regulations. for the rule. procedures, the authority that the EPA Implementation of the CPP is currently Congress could also pursue legislation is exerting, [which] we think is entirely stayed due to a surprise order from to block the rule. Specifically, inconsistent with its constitutional and the Supreme Court in February 2016. Congress could attempt to pass statutory authority. Agencies such as In September 2016, the US Court of stand-alone legislation repealing the the EPA should not be trying to ‘pinch Appeals for the DC Circuit heard oral EPA’s authority to implement CO2 hit’ for Congress.” On the science of arguments in litigation over the CPP, standards for power plants, though climate change he has stated that, and could issue a decision on the case passage in the Senate could be “global warming has inspired one prior to Mr. Trump taking office. If the difficult given that 60 votes will likely of the major policy debates of our DC Circuit upholds the rule, the Trump be necessary to defeat a filibuster. time. That debate is far from settled. Administration could appeal the Some Democratic senators, such as Scientists continue to disagree about decision to the Supreme Court, where Joe Manchin (WV) and Heidi Heitkamp the degree and extent of global conservative justices—assuming that (ND), would likely support this type warming and its connection to the Mr. Trump’s nominee to replace the of legislation, but the effort may fall actions of mankind.“ late Justice Scalia gets confirmed short in securing enough Democratic The CPP is clearly targeted for repeal relatively quickly—will command a support to clear a filibuster. by the President-elect and the 5-4 majority. If the DC Circuit rejects Congressional Republicans may also Republican-led Congress, but such the CPP, the Trump administration will use the appropriations process to efforts could face a complicated likely decline to appeal the decision block funding for the CPP.

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The most likely path forward is for United States but stated that China alone, along with states, will almost EPA to administratively withdraw the will continue its fight against climate guarantee that the U.S. will meet its CPP, but even this effort would be change “whatever the circumstances,” domestic reduction targets regardless time-consuming, as the agency would signaling that China intends to be a of the policies the new President ends have to initiate formal rulemaking to “climate leader” even if the US pulls up adopting. It is a mistake to assume undo the regulation. Notably, in Motor away from the Paris Agreement that what happens domestically and Vehicles Manufacturers Association of and UNFCCC negotiations. After internationally cannot be reconciled if the United States v. State Farm Mutual the election, President-elect Trump the Administration would like to keep Automobile Insurance Company, the softened his stance on Paris, stating up foreign engagement on climate Supreme Court unanimously struck that he has an “open mind” on the change policy. down a Reagan-era rescission of a issue of keeping the US in the Paris car safety standard. According to Agreement and acknowledging “some the Court, the administration “failed connection” between human activity to present an adequate basis and and climate change explanation for rescinding” the previous requirement. Thus, a Trump-led EPA In early December it was reported that will arguably have to offer “an adequate Mr. Trump’s daughter, Ivanka, may seek basis and explanation” for repealing to make climate change one of her the CPP, and that “adequate basis and signature issues. Subsequently, climate explanation” may be challenged by advocate and former Vice President Al NGOs and states, potentially tying up Gore met with her and the President- the rule in litigation for years. elect at Trump Towers in what Gore described as a “sincere effort to find While much of the focus will be on common ground.” Meanwhile, Mr. the CPP, the incoming administration Trump’s nominee for Secretary of and the Republican-led Congress State, Exxon Mobil CEO Rex Tillerson, may also target other Obama climate likewise has acknowledged the reality initiatives, such as methane standards of climate change. At the 2016 Exxon for new oil and gas operations, tailpipe Mobil shareholders meeting, he stated: emissions standards and the National “We believe that addressing the risk Environmental Policy Act (NEPA) of climate change is a global issue.” guidance. Some of these initiatives, Touting his company’s record on the such as methane standards for new oil- environment, Mr. Tillerson said that and-gas operations, could be repealed ExxonMobil has invested $7 billion by the Congressional Review Act; since 2000 to reduce the company’s other policies, like the NEPA guidance, greenhouse gas emissions, and that could be rolled back by executive the company supports a revenue- action. Other actions by the Obama neutral carbon price. “Relative to administration, such as its decision to the understanding of the science, retain existing tailpipe standards for there’s no space between us and the light-duty vehicles, are not subject to IPCC,” he said. the Congressional Review Act and may be more difficult to repeal. It is difficult to reconcile a reverse course of action at the EPA with a Keeping an open mind on decision by the Trump Administration climate change to stay engaged in the Paris During the November 2016 United Agreement. Indeed, it remains to Nations climate talks in Morocco, be seen whether or not President China’s President Xi Jinping noted the Trump will keep the US in the Paris importance of cooperation with the Agreement. However, business

dentons.com 31 Defense

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The 115th Congress will mark the first opportunity in a decade for a Republican-controlled House and Senate to work with a Republican president. In 2017, leading GOP defense and national security policymakers on Capitol Hill will work with the Trump administration to craft legislation and conduct hearings in support of the President-elect’s key defense priorities, including:

• Developing a new approach to is the confirmation of Secretary of To appease Democrats, Republicans counter ISIS. Defense nominee General James included a requirement that Mattis, the former commander of Mattis must receive 60 votes to • Eliminating existing defense US Central Command, and a leader be confirmed, as opposed to the spending caps established by the revered and admired for his blunt simple majority of 51 that applies Budget Control Act talk, intellect and devotion to the to other nominees (Supreme Court US military. By law, former military justices excepted). That said, Mattis • Increasing the strength, size and officers cannot serve as Secretary is expected to be easily confirmed as readiness of the US Armed Forces of Defense within seven years of the 26th secretary of defense by the retirement without a Congressional full Senate in January 2017. • Improving federal cyber security waiver. Congressional Republicans, infrastructure and capabilities in one of their last acts of the 114th Building on Congressional passage of Congress, inserted language into defense acquisition reform measures • Identifying efficiencies and other a must-pass bill to fund the federal over the past two years, McCain cost-cutting mechanisms within government that will streamline Mattis’ and Thornberry, with cooperation the Department of Defense confirmation process. from Democratic members of their (DoD) bureaucracy respective committees, will continue The language, which is limited to “the to champion legislation to streamline • Leveraging DoD innovation first person appointed as Secretary of the DoD procurement process initiatives to foster greater Defense” after the date of enactment and enhance the Department’s collaboration with non-traditional of the federal government funding innovation programs in an effort commercial interests bill (i.e., Mattis) reduces number of to, in Thornberry’s words, “get Although Senate and House Armed years in the statutory prohibition better technology into the hands Services Committee Chairmen John against military officers serving as of the warfighter faster and more McCain (R-AZ) and Mac Thornberry (R- Secretary of Defense post-retirement efficiently.” Cyber security will be TX) may not be in lockstep alignment from seven to three to accommodate another major policy focal point for with the Trump administration across Mattis’ retirement date. Additionally, defense lawmakers during the 115th the defense policy spectrum, enough the language includes numerous Congress. McCain has indicated that common ground exists to provide fast-track mechanisms for Mattis’ he intends to use his committee’s for a productive year of legislating confirmation, including expedited oversight function in 2017 to ensure and oversight by their respective consideration by SASC, elimination that the DoD and the Armed Forces committees in 2017. of the potential for procedural delays have “the resources, personnel, and seeking to postpone the Senate’s capabilities necessary to defend, One of the first orders of business consideration of the confirmation, and deter, and respond to our adversaries for the Senate Armed Services a 10-hour limit on Senate floor debate. in cyberspace.” Committee (SASC) in January 2017

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In the coming year, defense lawmakers Comprehensive Plan of Action Finally, Congress will pass its annual will also continue to exercise their (aka the Iran Nuclear Deal) defense policy bill, the National policymaking and oversight authority Defense Authorization Act, likely over matters relating to ongoing • North Korea’s continued with a considerably increased US military activities, including in development of its nuclear topline spending level and little- Iraq, Afghanistan, Syria and Somalia. weapons program to-no resistance from the Trump Additionally, the congressional Armed administration, in contrast to the Services Committees will continue to • ISIS’s expansion of its global often-strong opposition to key focus on: footprint, with a particular focus on measures in the bills provided by the continent of Africa the Obama administration in recent • Russia’s activities along Europe’s years. In sum, defense lawmakers Further, the House and Senate Armed Eastern Flank and in the on Capitol Hill are expected to be Services Committees will likely work Middle East busy and productive in 2017, working with the House Foreign Affairs and the collaboratively with the Republican- Senate Foreign Relations Committees • Iran’s influence and participation controlled White House to effect on cross-jurisdictional issues, including in ongoing conflicts in the Middle significant policy changes. East, as well as that nation’s assessments of existing and proposed compliance with the Joint US strategic defense alliances abroad.

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Education

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With the signing into law of the Every Student Succeeds Act (ESSA), the 114th Congress closed at the end of 2016 having passed the first major piece of education legislation in more than 14 years. The law serves to reform the Bush-era “No Child Left Behind” law and while ESSA enjoyed bipartisan support, the 11-month implementation effort exposed fractures among education stakeholders. With Donald Trump’s unexpected election to the White House, teachers unions and activist groups who were counting on a Clinton Department of Education to lead the full implementation of the law now face an agency that will have a very different agenda and a Congress bent on moving governmental power closer to the people, i.e., from the federal level to the state and local levels.

When Congress returns in January, it among others, as too prescriptive Both Senator Alexander and will resume its aggressive oversight of and not in line with the intent of Representative Foxx are eager to the implementation efforts of ESSA at ESSA. The expectation is that Mr. address, in the 115th Congress, what the Department of Education. Senator Trump as President will sign these they have strongly criticized as Lamar Alexander (R-TN), a former disapprovals and force the agency unnecessary or excessive regulation Education Secretary under President to step back from similar rulemaking. of higher education institutions George H. W. Bush, will return to the In the House, long-time education during the Obama administration. Senate as chairman of the Education policy leader Representative Virginia The reauthorization of the Higher Committee, in which role he is Foxx (R-NC) will take over as the chair Education Act (HEA) will be the vehicle expected to lead efforts to turn back of the House Education Committee. for attacking Obama regulations and controversial regulations issued late She has expressed her desire to pushing forward with other changes. in the Obama administration. Final consider legislation that would more During the first part of 2017, it is rules relating to teacher preparation broadly target segments of rules and expected that both Committees will programs in post-secondary regulations that come from federal begin hearings and discussions on education and K-12 accountability agencies, including the Department of the framework for a revised HEA. In requirements will be targeted for Education (ED), that have an outsized response to greater concerns about veto under the Congressional impact on the finances and time the cost of college tuition, federal Review Act, which allows Congress requirements of schools and school spending on higher education to reject specific regulations under districts and that place limits on the programs rose dramatically during the certain circumstances and with the authority of the ED to proscribe how Obama years. Pell grants rose from $17 President’s signature. Education states and districts must comply with million in 2009 to $30 million in 2016, policy makers view these regulations, federal law. with more students receiving such

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grants and Congress increasing the targeting of the for-profit sector. DeVos’s speedy confirmation is a maximum award amount from $4,730 This debate will continue during priority for the new administration, as to $5,815. Student loan programs Committee consideration of the HEA, it will have to deliver a new budget also have escalated significantly in as it is clear that programs offered to Congress for fiscal year 2018 and cost. The cost of higher education by quality for-profit schools are an expectations are that it will include a took center stage in the presidential important way of addressing the sizeable increase in the ED’s budget campaign with Bernie Sanders education needs of non-traditional for the charter school program to proposing free college tuition and and minority students as well as support the funding of new schools Hillary Clinton, during the primary, veterans and workers seeking around the country; this will be moving toward Sanders’ position job retraining. The expectation is controversial and the Secretary on higher education funding. The that the new Congress and the will play a key role in selling the difficult part for the new President Trump administration will work spending request. and Congress will be how to respond more closely with the for-profit to the continuing concerns about sector to ensure that standards for college affordability while at the same institutional accountability are more time controlling federal spending on evenly administered and that the higher education. There seems to public recognizes the significant be widespread support in Congress role that non-traditional education for restoring year-round Pell grants. programs can play in enhancing the However, the future of federally run educational capabilities of a 21st student loan programs will likely be century workforce. in for significant scrutiny, with many conservatives in Congress favoring a During the campaign, President-elect return to private-lender programs. Trump called for the elimination of the Department of Education, but such The Obama administration spent a move is unlikely at the early stages a great deal of time promulgating of his presidency. More recently, Mr. rules regarding the for-profit Trump caused a stir in some policy higher education community quarters with the announcement of and aggressively overseeing their Betsy DeVos to be his nominee for compliance. The Obama ED justified Secretary of Education. Ms. DeVos has its actions as necessary to hold a long history of philanthropic work for-profits to higher standards, to in the school choice, voucher, and weed out underperforming schools, charter school movements but she to make schools more accountable has never taught in a classroom or for marketing tactics that Obama served in an administrative capacity regulators saw as misleading or that with a public school system, so her enticed students to go deeply into selection was a controversial one, debt for limited workplace returns. roundly criticized by teachers unions Obama initiatives, such as the new as an attack on public schools, who Gainful Employment regulations, cite Devos’s support for aggressive which were cheered by liberal voucher programs. Editorial boards members of Congress, including around the country have pointed to Senator Elizabeth Warren (D-MA) her lack of experience in this role. and Senator Dick Durbin (D-IL), Countering those concerns, policy were heavily criticized by Chairman makers on the Hill, including Senator Alexander, Congresswoman Foxx Alexander, Majority Leader McConnell and other Republican members and others, have praised the choice of Congress as a clear example of and committed to moving her swiftly departmental overreach and unfair through the nomination process.

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Energy

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President-elect Donald Trump and the Republican-led Congress are expected to pursue pro-fossil fuel development policies and the regulatory rollback of some Obama-era environmental policies. The incoming administration is likely to quickly take some executive actions to encourage development of domestic energy resources and energy infrastructure. Since the election, Mr. Trump has pledged that one of his initial actions will be to “lift the restrictions on … American energy reserves, including shale, oil, natural gas and clean coal.” Specifically, his administration is likely to end the current moratorium on new coal leases on federal lands. In addition, the President-elect has signaled that he will request TransCanada Corp. to renew its permit application for the Keystone XL pipeline, though it remains to be seen how quickly the incoming administration will approve the project or whether the President-elect will require that the US retain a portion of the project’s profits. As covered in another section, the incoming administration will also attempt to roll back key portions of President Obama’s Climate Action Plan, such as the Clean Power Plan, and explore options for the United States’ withdrawal from the Paris Agreement.

In early 2017, the Senate Energy nomination of former Texas Governor Committee members regarding and Natural Resources Committee Rick Perry (R) as Secretary of Energy. various other DOE responsibilities, will be focused on confirming the During his confirmation hearings, the such as the clean-up of legacy President-elect’s nominee for head Governor may face sharp questioning nuclear facilities in Ohio, Tennessee of the Department of Energy (DOE) from Committee Democrats on his and Washington State. Mr. Trump’s and his choice for head of the skepticism concerning the science nominee to head DOI, Representative Department of the Interior (DOI). The underlying climate change but also Ryan Zinke (R-MT), will likely face Senate Energy and Natural Resources more parochial questioning from questioning from Committee Committee will consider Mr. Trump’s both Republican and Democratic Democrats on the incoming

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administration’s desire to expand the Bureau of Land Management’s the House Energy and Commerce fossil fuel development on federal hydraulic fracturing rule and other Committee could attempt to pass lands. The President-elect will also Obama-era environmental regulations nuclear waste storage legislation, an have the opportunity to nominate a not subject to the Congressional important priority for Representative new chairman of the Federal Energy Review Act. John Shimkus (R-IL), a senior member Regulatory Commission (FERC) and fill on the Committee. The House Natural two current Republican vacancies on In addition to focusing on the Resources Committee, under the the Commission, nominations which confirmation process and rolling back leadership of Chairman Rob Bishop the Committee will also consider at Obama-era environmental regulations, (R-UT), could also work with the some point in 2017. Neil Chatterjee, Senate Energy and Natural Trump administration on legislation a senior energy advisor to Senate Resources Chair Lisa Murkowski to expand fossil fuel development on Majority Leader Mitch McConnell (R-AK) and Ranking Member Maria federal lands. (R-KY), and Janet Sena, a senior vice Cantwell (D-WA) may resurrect their president at the North American comprehensive energy bill, which Another top priority for the House Energy Reliability Corporation, are failed to pass this past session. This Energy and Commerce Committee considered the two top contenders legislation, which garnered significant will be the already underway long- for FERC chair. Senate procedural bipartisan support in the Senate, term review of the Federal Power Act, rule changes no longer require 60 included measures bolstering energy the purpose of which is to ensure votes to end debate on presidential efficiency, expediting the LNG export that the nation’s grid is equipped for nominees (with the exception of process and encouraging hydropower the challenges of the 21st century. Supreme Court nominees), so there is development, among other key This effort was kicked off in June of little that Senate Democrats can do to provisions. Mmes. Murkowski and 2016 when Committee leaders sent block these nominees in the absence Cantwell have worked well together a letter to FERC Chairman Norman of opposition from at least several on the Senate Energy and Natural Bay requesting information on the Senate Republicans. Resources Committee, as evidenced current and future state of electricity by last year’s proposed bipartisan markets, which they followed up with The Senate Energy and Natural energy legislation. However, it remains a September hearing to examine the Resources Committee and the to be seen whether the bipartisan foundations of existing electricity House Natural Resources Committee cooperation will fray if the Committee markets. That hearing set the stage for are also expected to consider pursues legislation to expand fossil 2017, as the Committee plans to take a legislation to repeal some Obama- fuel development on federal lands. deep dive into the Federal Power Act era environmental regulations. For to better understand how technology instance, the Office of Surface Mining Regarding the House Energy has dramatically transformed the Reclamation and Enforcement and Commerce Committee, electric sector and what changes, if recently finalized, before President Representative Greg Walden (R-OR) any, need to be made to the 80-year- Obama leaves office, its stream will serve as chair, replacing current old Federal Power Act. Among other protection rule, which would bolster term-limited chair, Fred Upton (R-MI). things, the members will explore restrictions on coal mining near Additionally, there will be a new chair FERC’s deregulation of electricity in waterways. Congress could repeal on the Subcommittee on Energy the 1980s and 1990s and how those the stream protection rule and other and Power to replace Representative changes have shaped the wholesale recently finalized regulations under Ed Whitfield (R-KY), who retired in electricity markets today; whether the Congressional Review Act, which July 2016. With Mr. Trump in the the policies and lines of jurisdiction allows lawmakers to strike down final White House, the House Energy and laid out in the Federal Power Act still rules. Notably, the Congressional Commerce Committee could pursue make sense in today’s markets; and Review Act permits passage of reform of federal environmental whether the Federal Power Act, as disapproval resolutions under simple statutes, such as the Clean Air Act, written, could ensure grid reliability in majority votes in the Senate, rather though any significant effort to roll the future. than the 60 votes that are typically back environmental protections would necessary to defeat a filibuster. The likely face significant challenges in a two Committees could also review closely-divided Senate. In addition,

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Federal Debt Limit

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The federal debt limit, also known as the debt ceiling, is the legal limit, set by Congress, on the total amount that the US Treasury can borrow. See 31 U.S.C. 3101(b). As a result of passage of the Balanced Budget Act of 2015 (Public Law 114-74), the federal debt limit has been suspended since November 2, 2015, and is set to be reinstated on March 16, 2017, at roughly $20.1 trillion, the amount required to cover all borrowing that has occurred to fund government obligations since the debt limit’s last suspension. After March 15, 2017, if lawmakers fail to take action to once again increase or suspend the debt limit, the federal government will, eventually, be unable to meet its existing financial obligations in full and on time.

Because the federal government’s the Treasury, have been exhausted by resolution, legislation is required accumulated debt will immediately the Treasury), the federal government to make changes to the statutory equal the new debt ceiling, unless the cannot legally borrow additional funds limit on the public debt because the Congress acts by passing legislation until Congress raises or suspends budget resolution does not become for President Trump’s signature, the the debt ceiling, and the federal a law. Moreover, at some point, Treasury will once again have to government would be unable to pay Treasury’s extraordinary measures employ extraordinary measures to in full the bills for existing financial will be exhausted; so if the debt ensure that the federal government obligations (i.e., spending that has limit is not increased or suspended, continues to pay its obligations in full already been authorized and incurred). it will have only cash on hand plus and on time. (According to current Thus, a debt ceiling increase or daily revenue collections with which estimates, the federal government suspension eventually will become to make payments. (Once the debt can continue to meet all of its current necessary to prevent the United limit is increased or suspended, the obligations through midsummer States from defaulting on its debt, law requires the unwinding of any 2017 through the use of extraordinary something the federal government extraordinary measures that the measures. However, significant has never done and that could have Treasury has employed.) changes in the broader economy or disastrous consequences for the in federal spending or tax policy could federal government’s borrowing costs. Since the first overall debt ceiling materially alter this estimate.) was adopted in 1939, it has been Periodically, Congress considers raised more than 100 times, including If the level of federal debt hits and passes legislation to increase more than a dozen times since the debt ceiling (and so-called or suspend the debt limit. While 2000. Many, indeed most, of the extraordinary measures, usually any annual budget resolution is decisions by Congress to raise the involving a reduction in the amount of required to include appropriate levels debt ceiling have not been particularly intragovernmental debt invested by of the public debt covered by the controversial. However, in recent

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years, Congressional partisanship and the concerns of many about the size of both the federal budget and the deficit have made the subject of increasing the debt limit a highly controversial one.

Many Congressional Republicans have used the need for a debt ceiling increase as a platform to argue for reduced domestic discretionary spending and lower taxes, while some Congressional Democrats have used the debt ceiling platform to make the case for a reduction in deficit spending and greater fiscal responsibility through higher taxes and less defense spending. Far fewer members of the House and Senate seem willing to make the case for deficit reduction and balanced budgets as a matter of fiscal responsibility and intergenerational fairness. Thus, when the debt ceiling fight finally arrives, in March 2017, it may provide an early indication of whether the public has a greater interest in maintaining the creditworthiness of the federal government than do those the public has elected to represent them.

dentons.com 43 US Policy Scan I 2017

Financial Services and Banking

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While President-elect Trump has not set forth his views on financial services regulation in a comprehensive manner and did not often speak about financial services issues during the recently concluded campaign, he has been very clear that he views the Dodd-Frank Act as a “disaster” that has increased cost of operations due to greater regulatory oversight, stunted economic growth and interfered with lending–without any corresponding benefits for consumers. For these reasons, he believes that, ideally, the law should be repealed and the Consumer Financial Protection Bureau (CFPB) it created should be “dismantled.” Given the ability of an incoming President to nominate his own team to fill key positions at both the Treasury Department and the financial regulators, the expectation is that the Trump administration will pursue and implement a regulatory agenda that differs in fundamental ways from that of President Obama and most Congressional Democrats. The greatest uncertainty currently concerns not whether this shift will happen, but, like plans to repeal Obamacare and enact tax cuts, the speed with which it will occur.

While financial regulation reform is leader Mitch McConnell (R-KY) are In 2017, there will be several changes clearly a priority for the Trump White persuaded to adopt the view of among the key players with respect House, it appears that repeal of the Senator Pat Toomey (R-PA) that repeal to financial regulation. Although Affordable Care Act and starting of substantial portions of Dodd-Frank his confirmation process is likely the process toward achieving should be pursued this spring through to be contentious, Mr. Trump’s comprehensive tax reform will receive budget reconciliation and a FY 2018 nominee for Treasury secretary, earlier attention. How soon in 2017, budget resolution, a process that Steven Mnuchin, a veteran Goldman if at all, President Trump will turn would allow Senate Republicans to Sachs alumnus, hedge fund investor his attention to financial regulation pass changes to Dodd-Frank with 50 and Hollywood film producer who reform remains to be determined, votes and avoid the need to obtain served as the Trump campaign’s and will depend heavily on whether Democratic votes to meet the 60 vote national finance chairman, is President Trump and Senate majority cloture threshold. expected eventually to be approved.

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(Senate Finance Committee prospect of Mr. Mnuchin becoming reform legislation a priority, it’s Chairman Orrin Hatch (R-UT) says Treasury secretary is fueling the currently unclear whether he is that the committee will take up Mr. hopes of GSE shareholders that interested in offering legislation Mnuchin’s nomination in January.) a favorable settlement with the similar to the Johnson-Crapo bill Mr. Mnuchin’s nomination has been federal government that adds value from the 113th Congress or whether criticized by several key Democratic to their interests while achieving he is prepared, now that there will senators and representatives, housing finance reform, may be a Republican president in the including Senator Elizabeth Warren be more achievable. White House, to move closer to (D-MA) and Congresswoman Maxine Chairman Hensarling’s approach. Waters (D-CA), along with certain House Financial Services Committee community advocacy organizations Chairman Jeb Hensarling (R-TX), In the last Congress, Chairman opposed to predatory lending and who interviewed with Mr. Trump Hensarling introduced his Financial to home foreclosures who consider for the Treasury Secretary position Choice Act, a comprehensive wish Mr. Mnuchin a “Wall Street insider” before Mr. Mnuchin was named, list of changes that Mr. Hensarling who got rich off the foreclosure will lead the Trump administration’s would make to the Dodd-Frank Act crisis and who have promised to efforts to “dismantle” the Dodd- and various related financial services vigorously oppose his nomination. Frank Act. (Congresswoman Maxine issues. These changes include the They also argue that Mr. Mnuchin’s Waters (D-CA) will continue as the repeal of the Volcker rule, the Durbin selection contrasts sharply with, Committee’s ranking member.) With amendment on interchange fees and calls into question the sincerity the retirement of Congressman that caps the fees that banks may of, President-elect Trump’s attacks Randy Neugebauer (R-TX) and charge for debit card transactions, on the financial industry during the November election defeat of the Dodd-Frank Orderly Liquidation the campaign. Congressman Scott Garrett (R-NJ), provisions and the Department there will be new leadership on at of Labor’s “fiduciary” rule for Until resigning after his nomination least two key Financial Services investment advisers; the elimination was announced, Mr. Mnuchin subcommittees: Capital Markets and of the Office of Financial Research; served on the Board of Directors Housing and Insurance. the repeal of risk retention for of Sears Holding Corp. with Bruce securities backed by assets other Berkowitz, one of the leaders of Shortly after the next Congress than home loans; various changes the groups of Fannie Mae and convenes on January 3, 2017, there to the CFPB, including making the Freddie Mac investors (the GSE will also be new leadership of the bureau subject to the congressional shareholders) that have sued the Senate Banking Committee. Senator appropriations process; constraints federal government over the so- Mike Crapo (R-ID) will become the on the negotiation and adoption of called “net worth sweep” agreement new chairman as current Chairman international standards for capital that requires Fannie and Freddie Senator Richard Shelby (R-AL) is or insurance; reduced prudential to funnel all of their net proceeds term-limited. Senator Sherrod Brown regulation of banks in exchange for from their operations to the federal (R-OH), the Committee’s ranking heightened capital requirements government, thereby depriving the member in the 114th Congress, will such as maintaining an adjusted GSE shareholders of any return on continue in that role. When Senator leverage ratio of at least 10%; their investment. Crapo served as the Banking prohibiting the CFPB from restricting Committee’s ranking member in the use of arbitration agreements; On November 30, after accepting the 113th Congress, he and then and making all rulemaking by his nomination to become Treasury Chairman Tim Johnson (D-SD) independent financial regulators secretary, Mr. Mnuchin said: “We’ve offered housing finance reform subject to rigorous cost-benefit got to get Fannie and Freddie out legislation that differed sharply from analysis. Chairman Hensarling says of government ownership. It makes the approach of Jeb Hensarling (R- that the bill is designed to restore no sense that these are owned by TX), who currently chairs the House market discipline instead of relying the government and have been Financial Services Committee. While upon bureaucrats attempting to controlled by the government Chairman Crapo has expressed micromanage the economy. for as long as they have.” The interest in making housing finance

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Under the Financial Choice Act, except for the Federal Reserve’s conduct of monetary policy, all financial regulatory agencies, including the CFPB, would be on budget and made subject to the federal appropriations process. Every financial regulatory agency presently headed by single directors—the CFPB, the Office of Comptroller of the Currency, and the Federal Housing Finance Agency— would be converted into bipartisan commissions. Moreover, the Act would require all major financial regulations to first be approved by Congress before they can take effect. Chairman Hensarling intends to introduce, early on in the 115th Congress, what he has termed his “Financial Choice Act 2.0”; since the election, he has convened meetings with many of the major financial services trade associations Bureau would have to compete move forward with legislation that to get their input on changes they for resources with other agencies would wind down Fannie Mae and would like to see made to the and other priorities. Mr. Trump has Freddie Mac and take a more free updated Financial Choice Act before also expressed concerns about market approach to housing finance. it is introduced. the Financial Stability Oversight Howerver, he has called this a “very Council (FSOC) and its process for heavy lift” that looks to require a Mr. Trump is expected to pursue the designating financial institutions as longer-term process than some longstanding agenda of Chairman systemically important (SIFIs). The of his other priorities. Moreover, Hensarling and many Congressional President-elect says he shares Mr. Chairman Hensarling’s focus to date Republicans that the CFPB should Hensarling’s belief that the FSOC has been much more on reforming be eliminated or, at a minimum, does not add value to the economy. the GSEs and achieving housing substantially reformed. While (While it’s not clear that Mr. Mnuchin finance reform than on creating seeking the complete dismantling shares Chairman Hensarling’s remedies for GSE shareholders. In of the CFPB, Mr. Trump can be passion for repealing Dodd-Frank, contrast, Senator Crapo said that expected, at a minimum and he has said that he would “strip he is looking to advance housing using the Financial Choice Act as back” Dodd-Frank because the law finance reform after he becomes the a template, to support Chairman is “too complicated” and “cuts back Banking Committee chairman and Hensarling’s position that the on lending”). that overhauling the GSEs is “not at CFPB’s single-director structure (as all” too big of a lift. well as all single-director financial For many years, Chairman regulators) should be replaced Hensarling has decried the Dodd- Given the tremendous costs by a five-member bipartisan Frank Act’s failure to do anything associated with recapitalizing Fannie commission and that the CFPB, about ending Fannie Mae and Mae and Freddie Mac as well as the rather than being funded through Freddie Mac’s conservatorships. potential impact that changes to the the Federal Reserve, should be Chairman Hensarling is supportive housing finance system will have funded solely through the federal of an eventual renewed effort to on the cost and availability of the appropriations process, where the

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30-year mortgage, it seems clear Throughout the campaign, Mr. to assume financial regulatory that housing finance reform will take Trump emphasized a desire to positions will depend upon whether a good amount of time to achieve reduce the amount and scope of those banking regulators whose even if promptly and aggressively federal regulations, even indicating terms extend beyond President pursued. Whether and how quickly that he believes two regulations Obama’s January 20, 2017, departure Chairman Crapo, Chairman should be eliminated for every can be persuaded to resign their Hensarling and the White House can new one that is adopted. Thus, Mr. positions and leave early.) get on the same page with respect Trump surely can be expected to to these issues will be the key nominate financial regulators who Given the changes in the White factors in determining whether and share his view about the costs House and in the composition of how GSE reform is achieved. imposed by excessive regulation. the new Congress, the prospects These nominees, if and when are strong that Mr. Trump will Also certain to be on the agenda confirmed, can be expected to view be willing to sign bills providing of the Financial Services and their regulatory and enforcement regulatory relief to credit unions and Banking Committees in 2017 is responsibilities very narrowly. community banks and increasing reauthorization of the National Moreover, given the recent decision the minimum dollar threshold for Flood Insurance Program, as the by a panel of the US Court of potential SIFI designation. However, program’s authorization expires Appeals for the DC Circuit that with 60 votes still needed to break in September. To that end, the CFPB is unconstitutionally filibusters and if Senate Democrats Congressman Blaine Luetkemeyer structured and that its director must are willing to stand their ground, it (R-MO), Chairman of the Financial be terminable at will and removable may remain difficult, unless financial Services Committee’s Housing and by the president without cause, regulatory reform is pursued Insurance Subcommittee for the Mr. Trump is highly likely to remove through the reconciliation process, 114th Congress, in early December CFPB Director Richard Cordray for the Senate to pass, and Mr. 2016 circulated a set of principles and to nominate a replacement Trump to sign, anything except that he hopes will guide the debate who shares his views on financial truly noncontroversial financial on reauthorizing the program and regulation. (Obviously, separate services legislation. on how best to strengthen the from Mr. Cordray’s status, how soon private flood insurance market. Mr. Trump can nominate persons

48 dentons.com US Policy Scan I 2017

Health Care

dentons.com 49 US Policy Scan I 2017

President-elect Donald Trump has repeatedly promised to repeal and replace President Obama’s signature legislation, the Affordable Care Act (ACA), and with the Republican Party’s continuing majorities in both chambers of Congress, the law’s future is certainly in serious question. We expect the 115th Congress to grapple with the several questions below that will affect the timing and content of a legislative alternative.

1. Will Congress completely current question is how much of the to begin in early 2017 with a budget repeal the ACA on day one? ACA Congress will repeal using this resolution that would lead to a vote on Not possible. Simply put, the entire maneuver. Since the 114th Congress reconciliation legislation that would ACA cannot be repealed on day one did not pass a budget for the current repeal parts of the ACA, with some because it cannot be undone by fiscal year (FY 2017), when the next provisions getting a two- or three-year unilateral action on the part of the Congress convenes in January, it transition period until actual repeal. Trump administration. A repeal of the appears Republicans are poised to This “repeal and delay” strategy would entire ACA would require an act of introduce and pass a budget for accomplish a political win with a quick Congress, which means that at least this fiscal year with reconciliation vote on repealing the ACA, but the 60 votes would have to be secured in instructions that would allow for actual effective date of those repeal the Senate to overcome an expected Republicans to pass legislation that provisions would be years in the future. Democratic filibuster of such a repeal would repeal parts of the ACA. Some centrist Republicans and a bill. Republicans can, however, undo Certain parts of the ACA, such as those group of conservatives seek to include much of the ACA without Democratic which provide insurance coverage for pieces of an ACA replacement in the support using an arcane “budget children to age 26 and prohibit denials bill that will repeal the legislation. reconciliation” procedure that requires based on preexisting conditions enjoy While this “repeal now” perspective only 51 votes to pass in the Senate. bipartisan support and therefore are runs counter to GOP leadership, it has 2. How much of the ACA can unlikely to be included in reconciliation gained currency as some members of be repealed? legislation. The million dollar question Congress who fear “repeal and delay” Can vs. will. How much of the ACA currently facing the Republican may disrupt insurance markets. Congress can immediately repeal leadership in both chambers is whether If Republicans choose to pursue is vastly different from what, in all they have the simple majority needed the January reconciliation strategy, likelihood, Congress will immediately to pass a reconciliation bill that repeals repealing and replacing the ACA repeal. The budget reconciliation parts of the ACA without putting an will be a two-step process, with the rules are insanely complicated but alternative in place. possibility of a substantial amount congressional Republicans can use 3. What is the timing of the of time transpiring between the two them to take a giant bite out of the ACA repeal? steps. However, if consensus builds ACA early in 2017. The process has Since election night, that the two steps should be done in two key features: (i) it allows Congress Two possibilities. the healthcare community has debated sync, Republicans could use the FY to make changes that impact certain how much of the ACA will be repealed 2018 budget process, which would mandatory federal spending that is and how quickly. There are two give them time to build a consensus outside the annual appropriations options. The current strategy among around a proposal to replace the ACA. process; and (ii) legislative policy must Republican leaders in Washington is have a direct budgetary impact. The

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4. What will the Republican • Medical malpractice reform. repealed ACA will challenge the replacement look like? Based on successful state laws in capabilities of the new Administration Republican proposals that have been California and Texas, proposals on Congressional leaders of both introduced since 2010 can serve as include caps on non-economic parties. Already, the hospital industry indicators of what provisions currently damages, limitations on attorney’s has expressed its alarm that it will enjoy bicameral consensus. The fees, as well as incentives for states loose more than $160 billion in reconciliation bill vetoed by President to adopt additional solutions to revenues if the ACA if repealed. Obama in January 2016 could be settle disputes. Should federal subsidies end for the blueprint Republicans follow in lower income people purchasing dismantling the ACA. Also, this past 5. What is the future of coverage through health insurance summer, the House Republican Medicaid reform? marketplaces, many industry Conference, led by Speaker Ryan, Additional permission for state experts project an overall collapse set out the “Better Way,” a series of flexibility in Medicaid (including of the private insurance market for proposals on key issues, including additional requirements to be individuals. Recent improvements in healthcare, and when comparing the imposed on Medicaid beneficiaries) care quality and efficiency could be Better Way roadmap with some of the is a near certainty from the Trump lost if value-based reimbursement proposals introduced in the Senate administration. CMS distributed almost models, like accountable care in recent years, some consistent $350 billion in Medicaid payments to organizations, are eliminated. The themes emerge: states in 2015. Trump’s pick for CMS health care sector has integrated Administrator, Seema Verma, believes the ACA policies in ways that • Tax credits and portable in state flexibility and was the architect make eliminating those policies coverage. Bicameral proposals all of Medicaid reform initiatives in several exceptionally difficult. How the make tax credits available for the states. Common components of those Trump Administration and its allies in purchase of insurance. The Better plans included small cost-sharing Congress replace the ACA without Way proposal envisions a universal contributions from Medicaid recipients inflicting damage on the system or advanceable and refundable tax so they would have some “skin in the the people it serves and employs will credit to all individual and families game,” plus high-deductible plans and be perhaps the first major domestic who do not have an offer of health health savings accounts. The Medicaid policy test for the new government. coverage. The credit would not expansion that was included in the vary based on income level. ACA is likely tied to the fate of the ACA repeal efforts. It is possible that ACA • Insurance reforms. Many reforms repeal efforts or other legislative efforts from ACA remain, including could also provide more dramatic continuous coverage, expanded Medicaid reform. The Better Way purchasing options, and state- proposal would also have offered states based high-risk pools. a choice between per capita caps and state block grants as a way to reform • Strengthened consumer- the program and limit future growth. directed health. Current rules However, more dramatic Medicaid governing consumer-directed reform would need to be able to pass a health plans, such as health savings closely divided Senate where Medicaid accounts (HSAs) and flexible limits could cause a food fight that spending accounts (FSAs), would does not break on party lines. be modified. 6. Its harder than it looks. • Capping the employer exclusion. Confronting the financial, Bicameral proposals cap the tax programmatic and political deductibility of employer-based complexities and implications of health coverage in order to cover fashioning a replacement for a the cost of the tax credits they offer.

dentons.com 51 Homeland Security

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President-elect Trump spent much of his campaign assuring the American electorate that US national security would be a key focus of his presidency. In particular, he expressed a steadfast commitment to eradicating domestic terrorism. Soon after his election, Trump named former Defense Intelligence Agency Director and retired US Army Lieutenant General Michael Flynn as his national security adviser, and former National Security Council staff member K.T. McFarland as Flynn’s deputy. Although Flynn’s selection was met with a mix of support and opposition on Capitol Hill not easily divisible along party lines, there’s no arguing with his depth of knowledge and experience in counterintelligence and counterterrorism.

Trump has also tapped retired US appearing before Congress in 2014, he they hope and expect that Kelly, who Marine Corps General John Kelly emphasized that US border security has frequently expressed informed to serve as secretary of homeland operations are underfunded and and nuanced views on some of the security. As the former commander warned of a burgeoning “crime-terror more contentious policy issues that of US Southern Command, which convergence.” Despite the strong have bedeviled the DHS, will serve as oversees US military operations rhetoric, Kelly is considered to hold a check on the more ideologically- and activities throughout Central positions on many homeland security driven members of the Trump and South America, Kelly interfaced issues that are more moderate and administration. regularly with Department of pragmatic than those held by others Homeland Security (DHS) and who will serve in key posts in the Kelly’s confirmation will be a top intelligence community leadership. Trump administration. priority for the Senate Homeland The experience also afforded him a Security and Governmental Affairs unique understanding of the people, Kelly has also commanded Marines Committee in early 2017. Chairman policies and processes involved in Iraq as part of the War on Terror Ron Johnson (R-WI) has expressed in facilitating—and countering— and is the highest-ranking member strong support for Kelly, as has the trafficking of drugs and other of the US armed services to have his House counterpart, Chairman contraband, as well as humans, across lost a child in combat in the region. Mike McCaul (R-TX 10th). Both have the US-Mexican border. One of his sons, a Marine lieutenant, indicated an eagerness to work was killed in action in Afghanistan. with Kelly and new DHS leadership Like Trump, Kelly is an outspoken Yet those who have served with him to implement policies to better proponent of securing America’s insist that his moderate and open- secure America’s borders, enforce southern border, referring to minded views on Islam vis-à-vis the immigration laws and protect the the flow of drugs, weapons and West have remained unchanged. US from the now persistent threat of undocumented immigrants as posing Many Republicans and Democrats on terrorist attacks. an existential threat to our nation. In Capitol Hill have privately said that

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In the wake of well-founded allegations of Russian hacking of the US presidential election and a host of other crippling cyber attacks in 2016, the DHS committees will use their oversight and policymaking functions to make cyber security policy another major priority in 2017. With progressively more sophisticated cyber attack capabilities enabling even small nations and non-state actors to hack individual, corporate and government information systems, Congress is expected to focus in particular on protecting critical federal infrastructure from potentially devastating cyber attacks.

Guided by general agreement on a core set of policy objectives, it is likely that key Congressional lawmakers will work effectively with Kelly and his staff to shape, perhaps temper and, ultimately, implement many of Trump’s homeland security policy priorities in 2017.

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Immigration

dentons.com 55 US Policy Scan I 2017

While the debate over our nation’s immigration policy played a large role in the in the 2016 presidential campaign, Congress took no significant steps during the past session to consider comprehensive reform. Executive action from President Obama provided some protections to children of undocumented immigrants, but only after differences between Republican members and their constituencies regarding how to address—if at all—a pathway to citizenship for the undocumented put the issue on hold. But the end of the Obama presidency and, more important, the surprise victory of Donald Trump, whose aggressive rhetoric concerning border security, mass deportations and visa restrictions became a centerpiece of his campaign, virtually ensure its place at the forefront in the upcoming 115th Congress.

Under the Obama administration, his thinking. Senator Sessions was House. Rep. Goodlatte has favored despite an historic number a leading opponent of the last two prioritizing border security measures of deportations, there was an major immigration battles in the but is also seen as open to providing understanding by members of the Congress, viewing both measures undocumented immigrants already undocumented community as to as amnesty proposals that limited in the country with some form of what groups within the community enforcement measures and softened protected status. Hardliners in the would be subject to action by the temporary worker procedures, House will want to move quickly on federal government. With the election adversely impacting lower wage the security front, but they will have of Mr. Trump, the undocumented earners domestically. to contend with Republican reformers community awaits more clarity from who will be pressing for a more the President-elect as to how he While the Senator hope to be moving comprehensive approach. The latter intends to implement his campaign to the Justice Department—several have vowed to make the development promises, such as a border wall paid Republican members of the House of a pathway for undocumented aliens for by Mexico and a freeze on the and Senate who were key to the already here key to any bill that seeks emigration of refugees from countries attempts to move immigration reform to deal with border security. where there is widespread terrorist in years past will now be in position to activity. While there is currently little in craft new measures. House Judiciary In the Senate, Marco Rubio (R-FL), who the way of specific policy proposals, Committee Chairman Bob Goodlatte returns following his failed presidential Mr. Trump’s nomination of Senator (R-VA), a former immigration attorney, campaign, will be integral to the Jeff Sessions (R-AL) as US Attorney will have jurisdiction over any Trump administration’s efforts to pass General provides some insight into legislation that is considered by the legislation. Senator Jeff Flake (R-AZ),

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a member of the Senate Judiciary Committee and from a state that has endured major controversies over border security laws, will also be key to immigration reform. Senator Flake has joined with Senator Lindsey Graham (R-SC) to support legislation that would provide an extension of the protections currently in place to the children of undocumented workers until Congress can move to consider comprehensive reform.

The refugee crisis in Europe and the terrorist attacks that have plagued France, Belgium and, most recently, Germany, will also weigh heavily on the policy debate. While efforts aimed at securing our nation’s southern border will involve different policy proposals, there will be an effort by the White House to persuade Congress to consider limiting or suspending visas with respect to individuals coming from countries with heavy terrorist activity or without adequate vetting protocols in place. As Europeans increasingly are questioning the wisdom of open-border policies which, while allowing individuals with legitimate refugee status to escape Syria and other war-torn states have also provided ISIS and other terrorist organizations with a means of infiltrating the west, the United States is confronting similar concerns.

dentons.com 57 International Relations

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With the potential for significant shifts in US foreign policy under the Trump administration, politically charged debates over US involvement in conflicts, humanitarian crises, trade deals, and strategic alliances are expected to take place on Capitol Hill in the coming year. The President-elect’s foreign policy platform is continuing to be defined, and he has lauded the “element of surprise” and being “unpredictable” in the international relations arena. Once he is in office however, it is likely that his foreign policy objectives will begin to take shape, with guidance from both his inner circle within the Administration and from key Republican lawmakers on Capitol Hill, including Senate Foreign Relations Committee and House Foreign Affairs Committee Chairmen Bob Corker (R-TN) and Ed Royce (R-CA 39th). Congressional Republicans will have more leverage in 2017 as they not only will continue to control both the House and Senate, but will also now have a Republican president to collaborate with on policymaking priorities.

Trump has nominated ExxonMobil international energy on the National and the Caspian Sea region, which Chairman and CEO Rex Tillerson Security Council under President Tillerson oversaw directly at one point to serve as secretary of state. His George W. Bush, “the closest thing during his decades-long career at the confirmation hearing will be a top [the United States has] to a secretary oil and gas giant. priority in January for the Senate of state outside government is the Foreign Relations Committee. CEO of Exxon.” Nevertheless, his Congressional Although he has no public sector supporters include Senate Majority experience, Tillerson has, for a decade, Tillerson’s confirmation proceedings Leader Mitch McConnell (R-KY), helmed a company with virtually have the potential to be tense. Of Majority Whip John Cornyn (R-TX), unrivaled global dealings, interests most concern to Senate GOP defense and Corker, the last of whom will lead and influence. If ExxonMobil were a and foreign policy hawks, and many Tillerson’s confirmation hearing and country, its annual revenue would Democrats as well, are his reportedly was himself on the President-elect’s make it the 41st largest economy close relationships with Russian short list for secretary of state. Corker in the world. According to Robert President Vladimir Putin and members has described the ExxonMobil leader McNally, the former senior director for of Mr. Putin’s inner circle. ExxonMobil as “a very impressive individual” has extensive interests in Russia who has “an extraordinary working

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knowledge of the world.” In addition, to support the easing of sanctions Relations Committees will continue to outspoken Putin opponents, including against Cuba to help secure this exercise oversight and policymaking Senators Lindsey Graham (R-SC) legacy item for President Obama. authority over a host of other vital and John McCain (R-AZ), have foreign policy matters, including: indicated an openness to supporting Trump’s selections of Tillerson Tillerson’s confirmation as they for secretary of state and retired • The ever-expanding fight against continue to learn more about his Lieutenant General Michael Flynn ISIS and other extremist groups in background, relationships abroad and to serve as national security advisor Syria, Iraq, Libya and elsewhere positions on global policy matters. could be indicative of his interest Although there is little margin for in a reset of US-Russia relations. • Ongoing US military activities Republican opposition, Tillerson The President-elect has expressed in Afghanistan is expected to emerge from the a willingness to work with Russia in • The US alliance with Israel, and confirmation proceedings as the next the fight against ISIS, and Flynn is the stalled Palestinian-Israeli secretary of state. believed to support an improvement in US-Russia relations as well. Leading peace process Trump has stated that he plans to be Congressional Republican foreign • US involvement in NATO more assertive with US military power policy hawks, and many Congressional in the fight against the Islamic State Democrats, are loathe to embrace In 2017, the Trump administration of Iraq and Syria (ISIS) than Obama Putin as an ally and have indicated is likely to undertake a wholesale was, and also more proactive in that they would resist attempts to country-by-country reassessment engaging American allies throughout accommodate Russia, including by of US foreign aid and existing trade the Middle East. The President-elect easing sanctions imposed on the agreements. The Republican- will likely garner strong, and perhaps country as a result of its incursion controlled Congress is likely bipartisan, support on Capitol Hill for into Ukraine. As a result, the future to play a major role in this more aggressive action against ISIS. of US relations with Russia is a key process—shaping and, at times, Additionally, as the US likely begins to foreign policy position over which moderating, an anticipated shift redefine some existing alliances with Congressional Republicans and the in the geopolitical worldview foreign governments, Congressional President-elect may be very much at from 1600 Pennsylvania Avenue. foreign affairs lawmakers will likely odds in 2017. exercise oversight and policymaking authority over new defense and trade The President-elect has made strong deals, while debating the validity of, or statements against China, often at least certain terms within, existing referring to the nation during his trade deals, such as the Trans-Atlantic campaign as one of the US’ leading Trade and Investment Partnership economic enemies. He has said he (T-TIP), theTrans-Pacific Partnership plans to toughen rules against the (TPP) and the North America Free theft of intellectual property, combat Trade Agreement (NAFTA). subsidies China provides to boost exports and oppose the proposed TPP, Further, Congress will again debate the trade agreement that includes the and review sanctions against Iran, US, Japan and 10 other countries. Key Cuba and Russia in 2017, with Congressional Republicans are likely a particular focus on the Joint to support a tougher diplomatic and Comprehensive Plan of Action (aka policy posture toward China and will the Iran Nuclear Deal). Debate on have an opportunity to assist in the US relations with Cuba is likely to shaping of the Trump Administration’s pit the pro-commerce wing of the China policy in 2017. Republican party against the anti- Cuban Government wing of the party, Also in the coming year, the House with most Democrats continuing Foreign Affairs and Senate Foreign

60 dentons.com Supreme Court

dentons.com 61 US Policy Scan I 2017

After Justice Scalia passed away in mid-February 2016, President Obama nominated, on March 16, DC Appeals Court Judge Merrick Garland. The Republican Senate decided not to give Judge Garland a hearing or a floor vote and instead to wait until after the election when there was a chance that a new Republican President would be able to nominate Scalia’s replacement.

President Obama and Congressional means that Democrats may have her qualifications and background. If Democrats vigorously protested what the ability to block any new Trump this happens, Senate Majority Leader they considered an unprecedented nominee if 41 Senate Democrats Mitch McConnell (R-KY) may use the act of political obstructionism oppose ending a filibuster to consider same procedure Reid used in 2013 and dereliction of the Senate’s Scalia’s replacement. to lower the filibuster threshold from constitutional duty. A handful of 60 to 50. If he does not do this, it is Senate Republicans also favored In short, the Senate process for possible that President Trump’s new hearings on Judge Garland. But they confirming all judges, but especially nominee could be delayed indefinitely. never happened and the Senate GOP SCOTUS nominees, has descended gambit paid off when Donald Trump into partisan dysfunction that has In September, candidate Trump was elected President on November 8. left the chamber bitterly divided. released a list of names that he Democrats blame Republicans would consider for Supreme Court In 2013, then Majority Leader Harry for this mess and Republicans appointments should he be elected. Reid (D-NV) used a rare parliamentary blame Democrats. But whoever’s The Trump campaign did not share tactic to lower the filibuster threshold responsible, the Senate will likely how it settled on the names, but Mr. for all nominees from 60 votes to 50, head into uncharted waters during Trump had previously said that he was thus clearing the way for confirmation its consideration of the next seeking guidance from conservative of many of President Obama’s SCOTUS nominee. groups such as the Federalist Society nominees who were awaiting full and the Heritage Foundation. It is Senate consideration. Exhibiting an Democrats seeking revenge for the also not clear whether the list was uncanny prescience, Reid decided to GOP’s blocking of Judge Garland definitive or merely indicative of the exempt Supreme Court nominations may consider filibustering any new types of candidates he would select. It from the new 50-vote threshold. This SCOTUS nominee, no matter his or included the following names:

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Name Bio

Prior to the Georgia Supreme Court, Blackwell served on the state’s Keith Blackwell Court of Appeals. He spent much of his career at private law firms as an Position: State Supreme Court, Georgia associate and partner.

Charles Canady Canady was general counsel to Florida Gov. Jeb Bush before Bush Position: State Supreme Court, Florida appointed him to the state’s Court of Appeals.

Colloton’s name has been floated for the SCOTUS bench before. Colloton Steven Colloton is a reliable conservative who has upheld a law banning unauthorized Position: 8th Circuit Court of Appeals immigrants from renting apartments and expressed support for single-sex college student organizations.

Eid is a conservative, having clerked for Clarence Thomas, with respect Allison Eid from her peers. More than 90% of Colorado attorneys and judges said that Position: State Supreme Court, Colorado Eid should stay on the Colorado bench when she was up for reelection.

Neil Gorsuch Gorsuch was appointed by President George W. Bush in 2006. He Position: 10th Circuit Court of Appeal previously served as a deputy associate attorney general.

Gruender has consistently ruled on the pro-life side of abortion cases, once upholding a law that requires abortion seekers to be told that they Raymond Gruender are terminating a human being. He also wrote an opinion arguing that Position: 8th Circuit Court of Appeal employers shouldn’t be required to include contraceptives in health care coverage.

Hardiman has consistently sided with law enforcement officials against Thomas Hardiman defendants and inmates. He wrote a dissenting opinion that the First Position: 3rd Circuit Court of Appeals Amendment does not give citizens the right to tape police.

Raymond ordered the IRS to turn over information in a case involving its Raymond Kethldge alleged persecution of conservative groups. In his confirmation hearings in Position: 6th Court of Appeals 2003, Kethledge talked of his pro bono work with criminal defendants and low-income residents trying to keep their homes.

Larsen worked in the Office of Legal Counsel during the second Bush Joan Larsen administration, and wrote one of the legal memos on which Bush based Position: State Supreme Court, Michigan his administration activities in the early days of the war on terror.

Mike Lee The senator previously clerked for the US District Court in Utah and the Position: Senator from Utah Third Circuit Court of Appeals.

Lee filed a concurrence agreeing that fetuses should count as “minor Thomas Lee children” for the purposes of wrongful death suits. A strict originalist, Position: State Supreme Court, Utah he also argued that the constitution has no basis for the principle that evidence from unlawful searches cannot be used in trial.

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Name Bio

Edward Mansfield Mansfield is an adjunct law professor at Drake University. Position: State Supreme Court, Iowa

Prior to serving as a judge, Moreno worked in the private sector and Frederico Moreno was a federal public defender. Moreno was nominated to his position Position: State District Court, Southern by President George H.W. Bush and was unanimously confirmed by the District of Florida Senate in 1990.

Pryor called Roe v. Wade “the worst abomination in the history of constitutional law,” which he said has led to “the slaughter of millions of William Pryor innocent unborn children.” He also wrote an amicus brief supporting laws Position: 11th Circuit Court of Appeals banning sodomy, and equated homosexuality to necrophilia, bestiality, incest and pedophilia.

Appointed by President George W. Bush, Ryan is the only military judge on Margaret Ryan Trump’s list. She clerked for Justice Clarence Thomas and served on active Position: Armed Forces Court of Appeals duty in the Marines for 11 years.

Stras’s campaign site emphasized his view that judges should not include David Stras their own political leanings in decisions. He hasn’t openly expressed many Position: State Supreme Court, Minnesota controversial opinions as a judge.

Sykes ruled against Chicago’s ban on firing ranges on Second Amendment grounds, gave a decision barring enforcement of the Obamacare birth Diane Sykes control mandate, ruled in favor of Wisconsin’s restrictive voter ID law, Position: 7th Court of Appeals and decided that student organizations that ban gay members have a constitutional right to funding from public universities.

Thapar put an 84-year-old anti-nuclear activist nun in prison for bursting Amul Thapar into a Tennessee nuclear facility. He was nominated by President Position: State District Court, Eastern George W. Bush and was the first Indian American judge named to the District of Kentucky federal judiciary.

Tymkovich, appointed by President George W. Bush, wrote the majority in a Ninth Circuit decision in Burrell v. Hobby Lobby. He found for-profit corporations like Hobby Lobby to be exempt from a law if the corporation’s Timothy Tymkovich owners religiously object to it and there is a less restrictive way to promote Position: 10th Circuit Court of Appeals the law’s interest. As solicitor general in Colorado, Tymkovich unsuccessfully supported a state constitutional amendment preventing protected status based on sexuality.

Willet worked for George W. Bush’s presidential campaign and administration. He supports striking down economic regulations like Don Willett minimum wage and child labor laws using the 14th Amendment, saying Position: State Supreme Court, Texas the measures violated “freedom of contract.” Willet is also an outspoken critic of Trump.

Robert Young Young wrote an advisory opinion that a photo identification requirement Position: State Supreme Court, Michigan for voting was a “reasonable nondiscriminatory” requirement.

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Tax

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Tax legislation will be a major focus of Congress and the Trump Administration in 2017. They must, for example, deal with tax- related provisions in their planned changes to the Affordable Care Act. In addition, an infrastructure package and other high-priority legislation will likely have tax components as well. But tax issues will really move to the front and center when Congress takes up tax reform.

The scope and timing of tax reform depend on the ambitions of President Trump and Congress. Comprehensive tax reform that would rewrite the individual income tax, corporate income tax and estate-and-gift tax rules would likely consume the entire legislative year and much of 2018 as well. On the other hand, reform limited to certain areas of the Internal Revenue Code (e.g., international or corporate tax reform) could be enacted more quickly. However, reforming the tax rules for some types staff his tax and economic policy team language, whether in draft form of taxpayers but not others—even so that they can develop or react to a or as introduced bills, is expected if part of a staged approach—could detailed tax reform proposal. early in 2017 to elicit comment and raise significant problems. feedback. Of particular interest will In the absence of either a detailed be the “border adjustable” feature of How the Trump administration plan from President Trump or the House Republican Blueprint that decides to proceed with tax reform his endorsement of a specific effectively imposes a tax on imports will drive the effort’s scope, content congressional plan, the House is and an exemption on exports. The and speed. President Trump could expected to proceed with fleshing jury is still out on whether this feature identify specific requirements that out and drafting the tax reform would be the solution to tax reform tax reform must meet and major provisions set forth in the so-called (e.g., because it would permit a components that it must include, and House Republican Blueprint released greater corporate tax rate reduction then leave it to Congress to develop on June 24, 2016. Ways and Means than would otherwise be possible due the details of such a tax reform plan. Committee Chairman Kevin Brady to the revenue it raises) or its demise On the other hand, he could present (R-TX) and the rest of the committee (e.g., if it caused the retail industry or endorse a specific tax reform plan members met in December to discuss and other large importers to oppose and demand that Congress pass it the path forward, and they expect to tax reform). by a certain deadline. In any case, move quickly in the new Congress. for President Trump to be directly Due to the complexity and, in some The Senate Finance Committee will involved in the development of a tax cases, novelty of the ideas in the be focusing on tax reform as well. reform plan, he will need to quickly House Republican Blueprint, legislative Unlike Ways and Means, the Finance

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Committee has no blueprint before Republicans in control of both the it difficult for Republicans to be seen it, although it has a lot of previously House and Senate. President Trump as delivering on that promise if they prepared material on tax reform. and congressional Republicans enact more limited tax reform. In Chairman Hatch is expected to follow must agree not just on a tax reform the end, though, political support the traditional Finance Committee proposal but also how best to enact for a tax reform package will not be approach of seeking a bipartisan and it. Some will argue that the process enough—the public must support broadly supported proposal. The will be easier if tax reform is done in it as well. Chairman Brady, Speaker feasibility of this inclusive process stages (e.g., international tax reform Ryan, Chairman Hatch and Republican is tied, however, to political and first, or corporate tax reform before Leader McConnell not only have to sell procedural decisions that will be made individual tax reform). Others will the tax reform proposal they create to by House and Senate leadership, such argue that such a piecemeal approach their colleagues, they have to sell its as whether to proceed under Budget is politically infeasible or presents broad-based benefits to the public as Reconciliation and whether tax reform technical and revenue-estimating well. Tax reform will be a mixed bag will be revenue neutral (and, if so, how problems due to the interaction of for everyone, and it will inevitably stall revenue neutrality will be measured). tax provisions. In any case, both if companies and members of the President Trump’s campaign proposal public focus too much on particular Still, developing a tax reform package and the House Republican Blueprint components that they dislike and not that will pass both the House and have created expectations of enough on the legislation’s overall the Senate will be difficult, even with comprehensive tax reform, making effect and benefits.

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Telecommunications

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When the 115th Congress and President-elect Trump are sworn in come January 20, the Federal Communications Commission (FCC) will look remarkably different. Current FCC Chairman Tom Wheeler has announced that he will be stepping down on that day and, while no interim chairman has been announced, it is likely that current FCC Commissioner Ajit Pai will take the helm, at least on an interim basis. Democratic Commissioner Jessica Rosenworcel, who was not reconfirmed prior to the end of the 114th Congress, will be forced to leave, as her term expired at the end of the year. Thus, in the early days of the 115th Congress, the FCC will be a 2-1 Republican majority, with Republican Mike O’Rielly and Democrat Mignon Clyburn rounding out the agency’s leadership. It remains to be seen who Trump may tap to chair the FCC and who he will nominate to replace Commissioner Rosenworcel, but Jeffrey Eisenach, a visiting scholar at AEI and the FCC transition team leader, will play a key role in determining who the new faces are at the Commission. The FCC transition team also includes Mark Jamison and Roslyn Layton, both of whom are also visiting fellows at AEI as well and outspoken conservative advocates.

Despite not having a full complement Title II of the Communications Act on, seek to dismantle net neutrality by of Commissioners, it is expected and regulated the internet under its advancing new legislation to overturn that the agency’s Republicans will common carrier provisions as a public the reclassification of broadband move quickly undo several Obama utility. The Republican commissioners internet service as a common legacy regulations, with the FCC’s have already stated they would not carrier service under Title II. Finally, Open Internet Order 2010, a set of enforce certain provisions of the net President-elect Trump could also regulations that move towards the neutrality order and that they plan issue an executive order to reverse net establishment of the “net neutrality” to “revisit” the Title II proceeding “as neutrality, which he has referred to as concept, a prime target. In the Order, soon as possible.” The Republican- a “top-down power grab.” In short, net the FCC reclassified broadband under controlled Congress may also, early neutrality could be targeted through

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any one or a combination of these barriers to infrastructure deployment President-elect Trump weighed in on avenues and will no doubt be a top and encouraging innovation and the proposed transaction, explicitly priority for the FCC’s Republicans and investment in the network and stating that his administration would the Republican-led Congress in 2017. mobile technologies. We can expect not approve the merger. After the deal a continued push to accelerate 5G was announced, he called the deal Also in the 115th Congress, expect deployment on Capitol Hill as well, “an example of the power structure a continued and heightened focus as Senate Commerce Committee I’m fighting” and said it was “a deal we on spectrum policy, which, at the Chairman John Thune (R-SD) will likely will not approve in my administration macro level, enjoys bipartisan renew his push to get his MOBILE because it’s too much concentration support for increasing the amount of NOW Act (S. 2555), which would of power in the hands of too few.” That spectrum available for commercial free up more spectrum for both said, and while it remains to be seen use. The ongoing incentive auction commercial licensed and unlicensed whether the FCC will even have a role is well underway, with Stage 4 use and also improve broadband in the formal merger review process, recommencing on January 3. After infrastructure deployment, over it’s worth noting that all of Mr. Trump’s completion of Stage 4, there will the finish line. Department of Justice (DOJ) and FCC be another stage of the forward transition team advisors have a history auction at a date to be determined. Infrastructure spending will also be of being very pro-industry and anti- Generally, the Republican-controlled a key focus in the 115th Congress regulation, particularly when it comes White House and Congress will as President-elect Trump has to mergers. target such spectrum auctions to proposed to spend a trillion dollars raise funds, as well as seek ways to on infrastructure over the next 10 Finally, both the House and the Senate pry more government spectrum years. The heads of 17 tech and Commerce Committees will likely away for commercial use. In fact, telecom trade groups have already explore various paths to rewrite the FCC transition team member Roslyn written the President-elect urging Communications Act. Current House Layton is on the record as advocating him to make tech infrastructure Commerce Committee Chairman that federally held spectrum should upgrades a key element of his planned Greg Walden (R-OR) is likely to be sourced to meet the ever- infrastructure investments. build upon a series of white papers growing demand, especially in that he requested from industry the new Internet of Things world. The Trump administration will also beginning in 2014 as chairman of the Commissioner Pai has also been an be forced to address a number Telecommunications Subcommittee. outspoken advocate for facilitating of pending industry transactions Senate Commerce Committee the rollout of 5G, and has set forth a right out of the inauguration gate, Chairman John Thune (R-SD) is 5G regulatory framework that calls for the largest one being the AT&T- also on the record as saying that an freeing up more spectrum, removing Time Warner deal. As a candidate, update is needed.

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Trade

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International trade was a significant issue during the presidential campaign and one which President-elect Trump returned to often on the trail. First, he promised that trade agreements would come under much greater scrutiny in his administration and that trade enforcement efforts would increase. In addition, he stated, repeatedly, that his administration would pull out of the Trans-Pacific Partnership (TPP) agreement and would renegotiate the North America Free Trade Agreement (NAFTA).

TPP NAFTA It can be expected that soon after Trump spent much of his time on Mr. Trump’s swearing in on January the campaign trail, especially in 20, he will sign an executive order the Midwestern “rust belt” states, withdrawing the United States from expressing his dissatisfaction the TPP. While the US has signed an with NAFTA. He promised that his agreement signifying its intention administration would renegotiate the to implement the TPP agreement, agreement to make it a better deal the agreement has not been sent for US businesses and employees. to Congress and it has not been While it is certainly an option for him ratified by the required number of to sign an executive order right away Affordable Care Act (ACA) as well to countries for it to go into effect. With withdrawing from NAFTA, that would pass comprehensive tax reform in 2017, significant Democratic and Republican cause significant problems because both of which will demand the attention congressional opposition, passage of many business models—including of the same congressional committees the TPP, while supported by many in the location of manufacturing that have jurisdiction over trade, limiting the business community, was never a facilities—have been designed with the their ability to deal with an immediate foregone conclusion so withdrawing understanding that NAFTA was here withdrawal from NAFTA. from it will have little or no immediate to stay. Withdrawing suddenly from impact on the US economy. The NAFTA would disrupt supply chains However, both the Mexican and bigger issue with TPP is what happens and could put manufacturers located Canadian governments have agreed next. The remaining eleven countries in North America at a disadvantage to reopen the NAFTA negotiations and may ratify the agreement without the compared to foreign producers, have indicated the priority issues that United States. Alternatively, smaller particularly from China. they would want to discuss. Therefore, subgroups—some involving China— since it does appear that the parties may form. There will be future Pacific In addition, withdrawal from NAFTA are willing to renegotiate, President- Rim trade agreements and the issue would require Congress to pass elect Trump may decide to spend time will be whether the US is part of legislation to address the implementing early in his administration beginning those negotiations. statutes it put in place after NAFTA conversations with Mexico and Canada was signed and ratified. Congress regarding his priorities for renegotiation. is poised to repeal and replace the

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Other trade priorities steel, and a similar action, to address agreements and laws already on the As to other positions taken by issues of overcapacity in aluminum, books. Greater enforcement, however, President Trump, such as a 45 could also be taken. Overall, the means more resources dedicated percent tariff on goods from China, Trump administration could turn out to enforcement by the Department there is a good chance that the new to be more focused on managed of Commerce, Customs and Border administration will ultimately back trade as opposed to the traditional Protection and the Office of the off of these policies. Imposing an Republican free trade position. United States Trade Representative. across-the-board tariff increase— Each of these agencies currently has The other issue of focus of the new questionable legality aside—would be limited resources available to address administration will be enforcement. like using an axe where only a scalpel issues of transshipment, origination, While not as sexy as trade agreements is needed, as many products imported undervaluation, and market access, (negotiating/withdrawing from), from China are not produced in the among others. The issue for the new enforcement gets to the primary United States and the additional tariff administration will be whether—given issue raised during the campaign: would simply be a large tax increase competing demands on the public that existing trade agreements are on the American people. purse—they can target sufficient not always working for America. The resources to the issue of enforcement. That said, the focus on China will perception is that this is so because The best trade agreement with the not go away. The more likely policy they are not being enforced properly, strongest enforcement mechanisms approach would be the use of and many in the business community, is useless without the manpower and existing trade laws to protect sensitive including those that support free resources to carry out their mission. industries such as steel. There is trade, argue that the immediate focus, already discussion of a Section 201 before negotiating more agreements, petition for import relief involving should be on enforcement of the

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Transportation and Infrastructure

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On November 29, President-elect Trump nominated for secretary of transportation Elaine Chao, former secretary of labor under President George W. Bush. The wife of Senate Majority Leader Mitch McConnell, Ms. Chao is well versed in transportation policy, having also served as the deputy secretary of transportation under President George H.W. Bush, and her nomination should move swiftly through the Senate. In the nomination questionnaire she submitted to the Senate Committee on Commerce, Science and Transportation, Ms. Chao listed her top priorities and biggest challenges if she were to be confirmed for the position. Her top priorities included the effective enforcement of safety measures, improvements in the DOT’s planning and acquisition practices and preparing for the future by considering new infrastructure technologies. Echoing the President-elect’s calls for investments in infrastructure and regulatory relief, she stated,”[G]iven the nation’s need to improve critical infrastructure. It is important to find ways to expedite the process of making repairs and building new constructions and decreasing the regulatory burdens where appropriate.”

When confirmed, transportation out of the DOT under the Trump Immediately following the election, stakeholders will be watching administration. The most high-profile the primary focus in transportation what aspects of the previous proposals include changes to and/or and infrastructure policy was on Administration’s priorities remain repeal of the FAA’s Small Unmanned President-elect Trump’s infrastructure intact and which are reversed or Aircraft System (sUAS) Registration plan. However, it appears that repeal modified. On December 14, the Service and to trucking industry of the Affordable Care Act and House Freedom Caucus released a rules governing electronic logging tax reform have pushed a broad report entitled “First 100 Days: Rules, devices and hours of service, but infrastructure package to later in the Regulations, and Executive Orders the report also includes a proposal legislative calendar. Initially Trump to Examine, Revoke and Issue.” The to “Make Sonic Boom Again” by planned to unveil within his first 100 report provides a roadmap for some reconsidering the ban on overland days legislation intended to spur of the initial actions that may come supersonic flight. $1 trillion in infrastructure spending

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over the next decade. Details on this welcomed increased infrastructure operations in a non-profit corporation. plan are sparse but early reports spending, they have voiced concerns It has been reported that the chairman indicate that it will not contain direct that this proposal would merely be a has been lobbying the incoming government spending but instead will tax break for large corporations. Trump administration, as well as Ms. rely upon tax incentives to spur private Chao, to support this proposal in investment in infrastructure. This type In Congress, one of the early order to secure passage of his bill of proposal could be beneficial for transportation priorities will be next Congress. revenue-generating projects, such the reauthorization of the Federal as toll roads, bridges, seaports and Aviation Administration (FAA), which is The temporary FAA extension did airports, that may be attractive for currently operating under a temporary contain limited policy provisions, public-private partnerships, but it extension that expires on September including provisions to prohibit the may not be as helpful for proposed 30, 2017. While the Senate passed unauthorized flights of unmanned projects in rural areas that may not a bipartisan, comprehensive FAA aircraft systems (UAS) over critical be capable of producing a revenue reauthorization bill in April 2016, efforts infrastructure and pilot projects for stream. The key for movement on to pass a bill in the House stalled, counter -UAS technology and UAS this proposal will be to provide a resulting in a temporary extension of traffic management. The need to fiscally responsible plan to satisfy FAA funding through September 2017. reauthorize funding for the FAA, as conservatives and avoid the criticism well as proposals to regulate drone of many Republicans that followed House efforts to pass a bill came to a use and to streamline certification of President Obama’s American Recovery halt in large part due to a proposal in new general aviation aircraft mean and Reinvestment Act of 2009. Chairman Bill Shuster’s bill that would that Congress will seek to move this While Democrats on Capitol Hill have have privatized air traffic control legislation early in the session.

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Tribal Affairs

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The 115th Congress will bring new leadership throughout the federal government on Indian Country issues, including key positions at the Department of the Interior (DOI), the Department of Health and Human Services (HHS), the Senate Committee on Indian Affairs and the White House. Congress recently created a new Under Secretary for Indian Affairs at DOI through the Indian Trust Asset Reform Act, and it is not yet clear precisely how this leadership position will overlap with the duties of the existing Assistant Secretary of Indian Affairs in guiding the direction of Indian policy for the Trump administration. Additional executive branch appointments will include the Director of the Indian Health Service (IHS) and, potentially, a Special Assistant to the President for Native American Affairs in the White House Domestic Policy Council. At this point, the President-elect has not indicated who he will ask to serve in these positions.

While Mr. Trump has not discussed Markwayne Mullin (Cherokee), the Interior Department his priorities for Indian Country, chair of President-elect Trump’s President-elect Trump’s nominee for members of his Native American Native American Coalition. These Interior Secretary, Representative Coalition indicated that easing sentiments were reiterated by New Ryan Zinke (R-MT), appears to share the regulatory burden for tribes Mexico State Representative Sharon similar priorities regarding the to develop their natural resources Clahchischilliage (Navajo), another development of natural resources will be a priority. “In working with member of the President-elect’s on tribal lands. Accepting the the incoming administration, I am Native American Coalition, who nomination, he stated, “I will work confident that we can improve the stated that “the Trump Administration tirelessly to ensure our public lands land trusts and allow the tribes to be will ease restrictions on American are managed and preserved in independent in determining their own energy reserves worth trillions of a way that benefits everyone for use of resources and land. It is time dollars. Together we will block the generations to come. Most important, to end the overreaching paternalism bureaucrats holding Native American our sovereign Indian Nations and that has held American Indians businesses back and bring new jobs territories must have the respect back from being the drivers of their into our communities.” and freedom they deserve.” While own destiny,” said Representative in Congress, Representative Zinke

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introduced the Certainty for States is one of his top priorities, a position November 2016, at which time and Tribes Act, which sought to roll that has raised questions in Indian he indicated that he would “fight back the Obama Administration’s final Country given that a key component to improve our government-to- regulations related to the valuation of the ACA is to provide funding for government relationship and for and revenue collection process for the Indian Health Service through the progress on responsible energy coal, oil and gas production on federal Indian Health Care Improvement Act development, environmental and tribal lands. Congressman Zinke (IHCIA). In the 115th Congress, Indian protection, health care, education also introduced a bill that would Country will work to ensure that the and many other important issues.” make the Indian Coal Production Tax IHCIA survives the repeal of the ACA’s Chairman Hoeven is expected to Credit permanent, stating a desire to more controversial sections. advance a tribal agenda focused “create as few economic burdens as on tribal energy development and possible, especially since tribal lands Senate Committee on infrastructure, similar to that of former are subject to greater regulatory Indian Affairs Chairman Barrasso (R-WY). hurdles compared to private, state, or In the 115th Congress, the Senate federal projects.” Committee on Indian Affairs is House Committee on expected to be led by existing Natural Resources Health and Human Services members Chairman John Hoeven The leadership of the House Department (R-ND) and Vice Chair Tom Udall Committee on Natural Resources Representative Tom Price (R-GA), (D-NM). While Senator Hoeven is not will remain the same in the 115th a leading proponent of repealing yet officially the chairman (Senate Congress, with Representative Rob the Affordable Care Act (ACA), is Republicans are scheduled to officially Bishop (R-UT) serving as chairman President-elect Trump’s nominee to name committee chairmanship and Representative Raul Grijalava lead HHS. President-elect Trump has positions in January), Senator Udall (D-AZ) serving as ranking member. repeatedly stated that repealing ACA was officially named vice chair in Before being considered by the full Committee, tribal bills are first reviewed by the Subcommittee on Indian, Insular and Alaska Native Affairs. The leadership of this subcommittee has not yet been determined. Chairman Bishop is expected to reintroduce his lone tribal bill from the 114th Congress, the Tribal Recognition Act, which would repeal revisions to the 1990s-era regulations governing the formal federal acknowledgment of Indian tribes, and which would require petitioning tribes to instead obtain congressional approval. Ranking Member Grijalva is likely to continue advocating for his RESPECT Act, which would establish legal guidelines for executive departments and agencies to follow when consulting with tribes. A comprehensive tribal energy bill is also likely to work its way through the Committee to the full House for consideration.

dentons.com 79 2017 Dentons 50 State Policy Scan

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State Attorneys general Democrats, with open seats in Medicaid: In addition to the During the eight years of the Obama battleground states such as Florida, funding issues noted above, administration, Republican state Ohio and Michigan. And Colorado AG Alabama Medicaid is in the midst of attorneys general (AGs) actively Cynthia Coffman and Nevada AG implementing a managed care reform opposed what they described as Adam Laxalt are two Republicans who initiative known as Regional Care the president’s “federal overreach” must defend their seats in states that Organizations (RCOs). In an effort in a variety of areas, including went for Hillary Clinton. We will also to control costs and growth trends environmental regulation, immigration see new AGs in a number of states and improve health outcomes for policy and health insurance law. where existing AGs are expected to the Medicaid population, the RCO Certain lawsuits filed by Republican run for higher office. program, as statutorily designed, is AGs during this time were successful intended to authorize provider-led and, looking back, the political Alabama manage care entities to form in five fortunes of a number of the AGs Budget challenges/taxes: regions of the state . The program is likely benefited from the litigation. Alabama is unique as one of supposed to go live in July 2017 and Now, with the Trump administration the few—if not only—states many expect that the provider groups taking the reins and Congress firmly with two budgets. An Education leading the various RCOs (primarily in Republican control, we expect the Trust Fund (ETF) provides funding hospitals) will introduce legislation in AG litigation landscape to shift in the from pre-K through higher education the upcoming session to tweak, and opposite direction, with Democratic while a General Fund (GF) provides perhaps make substantial changes to, AGs using the power of their offices funding for all other functions of the reform effort as the launch date as well as the same tactics employed state government. The ETF is in approaches. The provider community by their Republican counterparts relatively good shape, with reliable, has also advocated for Medicaid in opposing President Obama, to earmarked funding from the state’s expansion, but for the time being counter President Trump. sales and income taxes. However, the that does not appear to have political GF has limped along for decades, as support of any magnitude. In addition to challenging the it is funded by a patchwork of fees, Trump administration with lawsuits, licenses, interest from state accounts Highway Funding: The Alabama Democratic AGs are expected to seek and other, less dynamic revenue Road Builders Association, along with to fill any regulatory voids created sources. At the same time, key GF- several allies, are once again expected by the administration in areas such funded agencies have seen explosive to introduce a gas tax increase of as antitrust, environmental and growth to the point that the Alabama $0.06 per gallon, with the funds financial services oversight. State Medicaid Agency and the Department designated for road construction and AGs have a well-established record of Corrections alone account for maintenance. Last session’s proposal of conducting multistate antitrust more than 60 percent of the GF called for the tax to be adjusted in investigations, including in connection budget—and their share is growing. In 2019, 2023 and 2027, according to with proposed corporate mergers. addition to reform efforts (discussed the average taxes in Florida, Georgia, With regard to financial services below), we expect to see, once Mississippi and Tennessee. The regulation, Democratic AGs have a again, additional revenue measures Legislature last raised Alabama’s strong working relationship with their proposed this session. Some of the gasoline tax in 1992. Drivers pay $0.18 former colleague and current Director more prominent proposals of the past per gallon in state tax, including of the Consumer Financial Protection that will likely re-emerge include a a $0.02 inspection. The Alabama Bureau, Rich Cordray. state lottery, a gaming compact with Department of Transportation the Poarch Band of Creek Indians, supports the legislation. On the electoral front, Republicans will codification of Mandatory Unitary have an immediate opportunity to Combined Reporting for corporate Prison construction: Governor challenge Virginia Democratic AG taxpayers, and a digital goods tax for Robert Bentley and the Alabama Mark Herring, who is on the ballot in online streaming content. Department of Corrections will once 2017. However, the 2018 political cycle again introduce a bond issue to appears to be more favorable to the build new prisons in the state. The bond issue proposed in the 2016

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session was priced at $800 million to than two years after his resounding bill restructuring how the state utilizes cover the cost of four new facilities. reelection the Governor’s political the earnings of the Permanent Fund Alabama’s prison system is at nearly clout has been (Alaska’s large oil revenue savings 180% of design capacity and facing significantly diminished. account), but the bill was rejected in several lawsuits for inadequacy of the House. The Legislature ultimately conditions. The innovative proposal Alaska passed an $8.75 billion dollar budget of the Governor and the Alabama Legislative elections: for FY 2017 that includes $2.2 billion Department of Corrections would The 2016 general in federal receipts and $4.26 billion shutter several outdated facilities and election resulted in a in unrestricted funds, and a $1.4 pay the debt service on the bonds historic change in the billion capital budget for the fiscal with the funds that would have been Alaska Legislature—a new Democrat- year beginning July 1. In response, spent on their repair and maintenance. led House of Representatives Governor Walker made a number of A key component of the proposal is majority has taken control from the budget vetoes, the most significant to use design-build for the new prison Republican-led majority that had being a line-item reduction of the implementation. In 2016, the prison ruled the House continuously for Permanent Fund dividend checks sent bond issue proposal was opposed by 23 years. The new majority will be to Alaskans in 2016 from a projected independent contracting firms and by led by a speaker with Alaska Native $2,000 down to $1,000. the communities where the facilities ancestry—Representative Bryce that are likely candidates for closure Edgmon (D-Dillingham)—for the first The budget crisis dominated the are located. time in history. The broad ramifications legislative session last year and it is of this significant shift in power are expected to be even more of a focus Impeachment: An overarching yet unknown, but it is expected that this year given the government’s political issue that could substantially the change will result in a different failure to adopt any long-term disrupt the course of the 2017 mix of issues and bills being debated solutions in 2016. legislative session is the ongoing in Juneau than we have seen in impeachment process facing Gov. recent years. Budget: There is significant pressure Robert Bentley (R). Currently in his from the public and Republican second term after being State fiscal crisis: An oil producing lawmakers to address the fiscal overwhelmingly re-elected in 2014, state, Alaska is experiencing a crisis in part by continuing to Gov. Bentley’s administration was profound and protracted budget explore options for reducing state faced with scandal soon after his crisis, as this is a time of low oil spending. In early December, second inauguration when, in August prices and diminished production Governor Walker released his budget 2015, his wife of 50 years filed for volumes from the famed Alaska North proposal for the upcoming session divorce amid widespread rumors that Slope oil fields. How bad is it? Ninety and it included a three percent he was having an affair with a staff percent of all state spending in Alaska reduction in unrestricted general member. The rumors exploded into has historically been funded by oil fund spending. He is proposing to fill newspaper headlines in early 2016 revenues, and due to the plummeting the gap primarily through proposals when a dismissed law enforcement of international oil prices, revenues that would generate more revenue cabinet member confirmed the affair to the state treasury have declined for the state, including taxes and a and added that the Governor went to by 80 percent over the past three restructuring of the Permanent Fund great—even illegal lengths—to years and the state is currently facing that has traditionally paid Alaskans’ facilitate and conceal it. These a yearly deficit over $3 billion. As a dividend checks. allegations prompted the Alabama result, the legislature and governor are House of Representatives to initiate engaged in a contentious, high-stakes Taxes: In addition to restructuring the an impeachment process, and that political battle royale over how to Permanent Fund, the Governor and process has now begun with an fund state government. individual members of the Legislature investigation by the House Judiciary continue to advocate for more and Committee. Even though his Last year, the Legislature failed to higher taxes. There are a number impeachment is far from certain, the take any significant action on the of new taxes under consideration, view in political circles is that less budget crisis. The Senate passed a including a statewide income tax and

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a statewide sales tax (Alaska is the Arizona Commission (ACC). In 2016, the only state to have neither), along with Tax reform: As part of Arizona Public Service Company proposed increases to existing taxes his campaign platform (APS), the state’s largest utility, and on the fishing industry, the mining in 2014, Governor Doug SolarCity engaged in a heated industry, the oil and gas industry, Ducey (R) promised that he would electoral battle over the election of motor fuel tax, sin taxes (alcohol, cut taxes every year in office. One three new commissioners to the ACC. tobacco, marijuana) and hospital tax. of his priorities around this promise APS supported the three Republican All tax proposals have been met with has been to greatly reduce, flatten candidates while SolarCity supported resistance from both sides of the or entirely eliminate the income the Democratic candidates. The aisle, with Democrats opposing tax tax. It is widely thought that he may Democratic candidates narrowly lost, schemes that are viewed as regressive take a stab at this in 2017, since a and it now appears the ACC will be (e.g., sales tax) and Republicans failed effort would be less impactful supporting numerous policy changes opposing those that they believe in a non-election year, whereas a which will be opposed by the rooftop would negatively impact the Alaska successful effort would carry over into solar industry. This past December, economy (e.g., income tax, industry an election year, building momentum the ACC voted to significantly change taxes). There is, however, an unspoken for him (and his legislative allies) net metering policies despite the vast recognition among the majority of among their base. Given that both opposition to the change from the lawmakers that some new taxes will chambers of the Arizona legislature solar industry and many consumer eventually be needed to help close the are controlled by Republicans (in advocates. In 2017, the battles will only historic deficit the state is facing. 2017, the Republican majorities will be intensify. It remains to be seen exactly 17-13 in the Senate and 35-25 in the what will happen, but a pending rate Low oil prices Natural gas pipeline: House), it would appear as though request hike submitted from APS to are also creating havoc around the Governor may have a clear path the ACC is sure to generate an intense Alaska’s seemingly endless dream for to pursue this tax reform measure. and very public debate on state a natural gas pipeline. Although, it is However, any significant change to energy policy. Other changes being the goal of Governor Walker’s the tax reform would most likely result discussed are adding nuclear power administration, the three major in a significant loss of revenue to the to the definition of renewable energy oil-and-gas producers who work in state’s general fund (Arizona relies on and encouraging the development of Alaska (BP, Exxon and ConocoPhillips) the sales and income tax; it does not viable electricity storage options for have all backed away from a have a statewide property tax), which residential and business customers. partnership to build the $60 billion would impact funding for education pipeline. In hopes of moving the and infrastructure, two issues that Education Funding and Reform: project forward, the Governor is There will be ongoing efforts—from have become ever-larger priorities shifting gears and the state is now both moderate Republicans and for Arizona voters across the political taking the lead. His administration is in Democrats— to increase funding for spectrum. So, it appears that Governor the process of looking for investors to education in 2017 and leading into Ducey will be looking to pursue a build the pipeline and buyers to 2018 (possibly via a ballot measure). larger tax reform package that will purchase the gas. The shift has Many conservative Republicans will be reduce or eliminate the income tax, elicited a negative legislative reaction opposed to these efforts, though they while offsetting the revenue loss by including a request from the state probably won’t go as far as proposing passing other revenue generating Legislature for an audit (which has any cuts to public education (at least legislative measures. What those are, started) of what the state has spent on any with political traction). The key however, remains to be seen. the project and the value it has question is: Where does Governor received. The Governor has said that if Energy: Like many other states, Ducey stand on this issue? In 2016, their project is unfeasible or there has been an ongoing battle he supported a very controversial uneconomical, he will drop any efforts between the rooftop solar industry education funding formula ballot by his administration to move it and traditional utility companies. In measure—Proposition 123—that barely forward, which is what BP, Exxon and Arizona, the energy sector is largely passed, and part of his commitment ConocoPhillips have already done. regulated by the Arizona Corporation to education advocates and voters during that campaign was that

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Prop. 123 “was just the beginning” Marijuana: A ballot measure to Government efficiency: The of overhauling how schools were legalize marijuana lost in 2016 by efficiency-within-state-government funded in order to get more dollars approximately 3 percent, but focus includes state government into the classrooms. However, since supporters are already gearing up for agency consolidation and the passage of that ballot measure, another effort in 2017 and 2018. The reorganization, elimination of 19 the Governor has been relatively GOP majority-led legislature is boards and commissions, and state quiet on the issue. It is expected that decidedly anti-marijuana, which employee incentive programs. he will unveil his plans sometime means that pro-legalization advocates in January 2017, possibly during his will once again have to focus on a Prison reform: Arkansas has the “State of the State” speech. Suffice it citizens’ initiative. Efforts to come fastest-growing inmate population to say that any plans for reforming or together on specific language and in the nation and Gov. Hutchison increasing funding for schools will be overall approach will begin in 2017, has asked that the general assembly highly polarized. Additionally, there and ballot qualification activities look at reducing incarceration and are ongoing education reform and (signature gathering, fundraising, etc.) has also proposed establishing a $5 accountability efforts, including but will begin in late 2017 or early 2018. million pilot for mental health crisis not limited to more portable funding stabilization centers. attached to students, more consistent Arkansas accountability across traditional and The Arkansas 2017 session Miscellaneous: It is anticipated that charter schools, increased access starts Monday, January the general assembly will tweak state to quality schools and overall school 9, and continues for laws in response to a recently passed choice for parents and students, and approximately 60 days. Arkansas is one medical marijuana amendment. In an ongoing fight around Common of the “Republican trifecta states,” with addition, prefiled bills give a nod to a Core/uniform testing standards. All of the governorship and both bodies of range of social issues, from abortion these issues will be front and center in the General Assembly, the State Senate to gay rights. Highway funding will the education space throughout 2017. and the House of Representatives, continue to be on the radar. under Republican control. Governor Medicaid: Arizona was one of the Asa Hutchinson has laid out an California Recreational marijuana: GOP-controlled states that passed ambitious legislative agenda with Now that California voters Medicaid expansion. Though many 18 main policy ideas that he placed have passed Proposition GOP legislators would like to see the into three main buckets—economic 64, legalizing marijuana use repeal, or at least a significant overhaul, development, education and state for adults for recreational purposes, of Obamacare, the reality is that any government efficiency. loss of the Medicaid expansion dollars the Legislature will be fully engaged would have a significant negative Economic development: A tax cut in wrestling with the repercussions. impact on the state’s economy proposal by the Governor, estimated at One difficult issue is how to safely and communities. While it may be $50.5 million, focuses on lower-income and securely bank the proceeds ideologically appealing to support the residents and would make military from this cash-only business for a elimination or overhaul of Obamacare, retirement pay tax-exempt. One of his variety of purposes, state and local once the details and impacts begin recommendations to pay for the $50.5 tax collection among them. The taxes to take shape the actual political million tax cut would eliminate the sales themselves will have to be dealt with, discourse around the issue may tax exemption on manufactured homes. and other matters to be addressed will change substantially. Furthermore, impact the motor vehicle, labor and the business community came out in Education: On the Governor’s insurance codes. full support of Medicaid expansion, so education agenda are proposals for Transportation: California’s it will be interesting to see if it would teacher training, higher education transportation infrastructure is aging, oppose a massive overhaul that would funding tied to student performance, in need of repair and underfunded cut into the Medicaid expansion dollars a heightened emphasis on reading, by as much as $5.7 billion per year, and, if so, how that position would be and a grant for the full cost of tuition according to some estimates. A recent received by the Governor’s Office and at two-year institutions for students in legislative report identified the need GOP-controlled Legislature. high-need areas of study.

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for an additional $7.8 billion annually transportation and other budget Medicaid expansion given that the to restore the state’s roads to best- issues. However, with the state Senate proposed director of CMS is Governor practice level. The Governor and controlled by Republicans and the Pence’s former Medicaid director, the Legislature will focus on ways of House controlled by Democrats and how the potential of block grants closing this funding gap. this scenario is likely not to happen. being given to the states will affect What we are likely to see is more of the planning of health insurance offers Cap and trade: California has been what we saw in 2016—far-right and and Medicaid. ambitiously implementing AB 32, the far-left bills introduced and killed in Global Warming Solutions Act of their respective committees, and Energy and renewables: Though 2006. Implementation of this far- middle-ground bills going to the environmental activist Tom Steyer and reaching measure relies on a cap-and- Governor’s desk. billionaire George Soros contributed trade system that is coming under heavily to Democratic candidates in increasing criticism from the What the Governor’s budget proposes Colorado, Republican Heidi Ganahll environmental justice community. The and what the Legislature and Joint won the coveted CU Regent seat legislative agenda next year will likely Budget Committee recommend and the state Legislature stayed in go beyond the usual debate over usually has to be hammered split control. This means that activist appropriate targets and timing to also out during legislative budget environmental issues will not be in full include scrutiny of the state’s cap-and- considerations, which will occur in play in the Legislature or at CU in 2017. trade program itself. April 2017. The Governor’s current With the passage of Amendment 71 budget cuts $109 million out of “Raise the Bar” in Colorado, a greater Colorado expected transportation projects— number of signatures across the The 2016 elections saw which some think is the signal that the state must be obtained to change a number of statewide Legislature must address the hospital the Colorado Constitution—making it measures pass, including an aid- provider fee in order to move monies harder for anti-oil-and-gas activists to in-dying measure that will allow back to transportation needs. New put multiple measures on the ballot. terminally ill patients to take their own Senate President Kevin Grantham (R) lives with medication prescribed by and House Speaker Crisanta Duran (D) Sugar tax: The City of Boulder passed physicians, replacement of political have pledged to come together on the state’s first sugar tax and interest party caucuses in favor of a state- Colorado’s transportation issues—but groups are looking to introduce run presidential primary, the ability the bonding issues to “get there” could similar statewide legislation in 2017. of unaffiliated voters to vote in the prove overwhelming. Legislation is expected to be similar state’s primary, an increase in the state to Philadelphia’s wide-sweeping minimum wage, and a measure that Medicaid expansion vs. K-12 legislation, with the tax revenue being makes it harder to get constitutional education: The Governor proposes used to fund a number of health and amendments on the ballot. A a total budget of $28.5 billion with non-health-related programs. statewide tobacco tax was rejected $926 million in new needs that have as was a statewide healthcare system. to be balanced against $426 million Pharmaceutical drug cost The City of Boulder passed a sugar tax in available revenue. Two outstanding transparency: A bill was introduced and about two-thirds of the 44 school items that must be covered by the in 2016 that will likely return in 2017 districts that had funding requests on budget include $243.5 million in requiring pharmaceutical drug cost the ballot were successful. K-12 new students and inflation, and transparency. Given the Mylan scandal $142 million in new Medicaid costs. this past year, consumer groups and Governor’s budget, hospital Medicaid expansion has outpaced healthcare agencies are likely to make provider fee and transportation: K-12 education for the first time in the discussion of drug price increases The Governor’s budget outlined $500 funding needs, a development which and transparency a high-priority item. million in cuts between needs and budget analysts say will only continue. projected revenue. The key message With a new Trump administration, the Autonomous vehicles: Uber, Lyft, of his budget—turn the hospital discussion turns to the future of the Google, car dealers and other provider fee into an enterprise fund state health exchange, the changes stakeholders all have their eyes and thereby free up monies for that will be made to states with on advancing driverless vehicles

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in a variety of shapes and forms. period of time. While the deal will Given the incredibly challenging Legislation outlining rules and not have an effect on the upcoming budget circumstances, there is a regulations will set the stage for biennial budget, it does provide long- chance that legislators, as well as the testing and use in Colorado. term relief from potentially crippling Governor, could hold their noses and required contributions, which are support a plan to legalize possession Procurement modernization: estimated to rise to $4-6 billion of the drug if forecasted revenues Interested parties doing business in annually over the next ten years. are significant enough to provide Colorado will want to pay attention to a long-term solution to the state’s the Department of Personnel and Education funding: A recent ruling budget issues. A plan to legalize and Administration’s move to address the by a Connecticut superior court tax the sale of marijuana was one of procurement code in Colorado— judge regarding the state’s method of Senate President Martin Looney’s first something that will have businesses, funding its education system is forcing ten pieces of legislation filed for the non-profits and attorneys following legislators to rethink the way they do upcoming session. this legislation. business. In his unprecedented ruling, which received national attention, City of Hartford: Hartford Mayor Luke Connecticut the judge called the state’s method Bronin has recently embarked on a Budget issues: The state of funding its schools “irrational,” and tour of the city’s suburbs attempting is facing a significant ordered legislators to come up with a to drum up support for regionalization budget crunch as the plan, within 180 days of the ruling, for initiatives and increases in state Legislature prepares to kick off the reapportioning state education aid. funding for the city, which capitol 2017 legislative session and craft a watchers anticipate he will propose biennial budget for fiscal years 2018- Both the state and the plaintiffs in the in the upcoming legislative session. 19. Anticipating a budget deficit of case—an unusual coalition of labor The Mayor claims that the city is more than $1 billion in the next fiscal and management and small towns on the verge of bankruptcy due to year, Governor Malloy has asked and big cities—have appealed the sharply increasing pension costs and state agencies to propose budgets case to the Connecticut Supreme inadequate revenue, which comes that include ten percent cuts in Court. Despite the pending appeal, the almost exclusively from the city’s discretionary spending. Meanwhile, Legislature may nevertheless adopt a property tax (currently the highest in the Governor’s budget staff, as well new means of apportioning education the state) and state aid in the form of as leaders on both sides of the aisle, funding in anticipation of a ruling from “payment in lieu of taxes” (PILOT) for tax are struggling to find ways to make the state’s highest court requiring it to exempt property. Roughly 52 percent up the shortfall without increasing do so by some future date. of Hartford’s property is classified as taxes or fees—a feat few believe tax exempt. If Hartford were to declare will be possible without significant Marijuana: With the emergence of bankruptcy, it would be the second cuts in social services programs and state budget issues, as well as the largest municipal bankruptcy in US municipal aid. recent passage in Massachusetts of history behind Detroit, MI, and the first a referendum legalizing marijuana, bankruptcy of a state capitol. While the immediate future looks bleak, some Connecticut lawmakers are there is some positive news coming considering legalizing the possession Transportation: Transportation has out of Hartford with regard to the of marijuana. Unlike Massachusetts, been a major focus for Governor long-term health of the state budget. however, the Connecticut Constitution Malloy in recent legislative sessions, Governor Malloy and union leaders does not allow for direct referendum and the trend is likely to continue. from across the state recently inked questions. As a result, any legislation With many roads and bridges a deal that would prevent pension legalizing and taxing the possession across the state in need of repair payments for state employees—the and sale of marijuana must be or replacement, the Governor will primary driver of the state’s budget approved by a majority of the members likely renew his efforts to create a woes—from increasing dramatically of both houses of the General “transportation lockbox” that would over the next 16 years. Under the deal, Assembly, as well as the Governor, ensure that transportation funding is pension payments would be stabilized who has historically been against the not appropriated for other purposes by spreading them out over a longer legalization of recreational marijuana. (such as budget shortfalls) in the

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future. Instituting tolls on Connecticut administration, as well as business Transportation/Infrastructure roads and highways is also likely to groups, oppose it, citing fears of high Improvements: In 2017 the General be a topic of discussion this session, administrative costs. Assembly must address road as state legislators grapple with construction and consider ways balancing the budget. Consumer packaging: In the last to raise millions of dollars for road, legislative session, Sen. Ted Kennedy infrastructure and bridge projects. Minimum wage: Unions and Jr. led the charge to pass legislation DELDOT is currently reviewing and progressive groups are expected to that would drive decreases in the considering the feasibility of a “road use make a strong push for increasing amount of consumer packaging waste fee.” Drivers would be charged based the minimum wage to $15 in the entering the solid waste stream. His upon the number of miles they drive on upcoming session. Legislation that push ended with the creation of a task Delaware roads. would raise the minimum wage force charged with studying the issue. to $15 by 2023, and allow it to rise Although the committee never met, Escheat: A lawsuit by 21 states against with inflation in the years thereafter there may still be renewed action Delaware filed in June is seeking $150 has been filed by Senate President within the legislature to take action on million remitted to Delaware when Martin Looney. the issue. If legislation is proposed, it money orders throughout the country may be similar to what Kennedy go unclaimed. Delaware claims federal Minimum alcohol pricing: Under introduced last year, which would law permits it to collect unclaimed current Connecticut law, alcohol have required the state Department of property from financial service retailers across the state must adhere Energy and Environmental Protection companies incorporated in the state. to strict minimum pricing laws. to amend its solid waste plan and set a Abandoned property, which includes Large alcohol retailers are expected goal of eliminating half of all money orders, account for about 15% to push legislation to either lower packaging from the trash stream by of the Delaware state government’s or repeal the pricing minimums, the mid-2020s. annual income. arguing that the law hurts consumers and limits competition. Supporters Delaware Education: The fight in Delaware of minimum pricing, on the other General Assembly/special during the 2016 legislation session hand, say it protects the state’s small election: Although there was was related to the ability of a child liquor retailers and help keep them in no significant change in the to opt out of the annual assessment. business. Governor Malloy has sided House of Representatives in terms The General Assembly attempted with the large retailers in the past of composition and leadership, the to override the Governor’s veto. and, if the issue arises in the coming Democrat-controlled Senate suffered The legislation creates the right for session, is expected to do so again. a major upset in November when the parent or guardian of a child to Democrat Patricia Blevins, Senator opt out of the annual assessment, Family medical leave: This year, the and President Pro Tempore of the currently the Smarter Balanced top priority of the Senate Democrats Senate, lost to an unknown Republican Assessment System. will be passage of legislation challenger. As Democratic Senator creating a paid family leave system Bethany A. Hall-Long is vacating her Budget: In September, the Delaware in Connecticut. The legislation would seat after winning the race for lieutenant Economic and Financial Advisory establish an insurance program governor, a special election will occur in Council projected the state will have funded by employees through late February or early March which will $3.9 billion to spend in the 2017- payroll deductions that they could give Republicans a legitimate chance 2018 year. That’s about 4 percent draw benefits from in case of the of gaining control of the Senate after less than the current budget. DEFAC birth of a child or if a medical 40 years of Democratic rule. If the meets several times a year to adjust emergency arises. Labor groups Republicans win this race, there will be projections using the latest data. strongly supported the legislation some significant issues brought forth Meetings are planned for March, April, last year, citing the passage of similar such as passage of a right-to-work law, May and June, when legislators will laws in states such as California, rewrite of the workers’ compensation be given the final number for how Rhode Island and New Jersey. law, paycheck protection legislation and much they can spend in the next However, members of the Malloy tort reform legislation. fiscal year. The state’s fiscal year is

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July 1 through June 30. The projected a $0.10 increase that would raise Corcoran has publicly stated that the decrease is primarily because of lower approximately $50 million in House budget will include zero funding projections from both the corporate additional revenue. because it is wrong and inefficient for income tax and the personal income the state to pick winners and losers. tax. Even as revenues are expected Florida This could be a big bargaining chip. to grow, spending is expected to Education: State Senate Last year the House prevailed in automatically increase. For example, President-Designate blocking Gov. Scott’s request for $250 DEFAC went over numbers that Joe Negron (R-Stuart) million. The Senate is expected to offer show the price tag of Medicaid and has, for over a year, indicated the some support for the Governor. health care costs for state employees need for a large increase in funding continuing to increase dramatically for universities and student financial Workers’ compensation: The Florida faster than inflation. aid. Negron wants to boost the Supreme Court struck down part of prestige of at least some universities the workers’ compensation law that Coastal Zone Act: This session to the level of, say, University of capped attorneys’ fees. Businesses one of the biggest issues will be North Carolina at Chapel Hill and fear large increases in workers’ comp the revision of the Delaware Costal University of Virginia. By contrast, costs and the legislature and Governor Zone Act. Many in the business incoming Speaker of the Florida want to find a way to deal with the community are looking to revise House of Representatives Richard court ruling and keep workers’ comp the 45-year-old legislation, which Corcoran (R-Land O’ Lakes) wants to costs in check. Watch for a huge effort has severely limited heavy industry improve K-12 education by enhancing by the Florida Chamber of Commerce on the coastline and is considered the quality and effectiveness of to try to reverse the nearly $1.5 billion the biggest impediment to the teachers and significantly growing in costs to Florida businesses. development of DuPont’s Edgemoor the number of high-impact site and the former General Motors charter schools in the state’s Healthcare deregulation: A plant on Boxwood Road. Amending most impoverished communities. push to eliminate certificates of the Coastal Zone Act would also need for hospitals and a debate have a direct impact on the sale and Water/Everglades/Lake on 24-hour ambulatory surgery expansion of the Port of Wilmington. A Okeechobee: Florida experienced centers is expected. fight from environmental groups and unprecedented algae bloom earlier interests is expected. this year. Senator Negron—whose Transportation: With Florida’s Senate district was most adversely population expected to grow by more Sugar tax: We understand that impacted—has pledged to make than 6 million by 2030, the state’s legislation is currently being drafted solving this problem and improving need for reliable, affordable mass and considered that would be based the health of the Everglades his other transit has been brought to the upon the Philadelphia model. major priority (beyond enhancing forefront. New Senate Appropriations universities). He has floated the Chairman Jack Latvala (R-Clearwater) Rideshare/transportation networks: outlines of a federal-state partnership says that recent budgets have Uber passed legislation in 2016 here that would invest $2.4 billion to buy bounced back after years of cuts, but in Delaware. We understand that land owned by the sugar industry for there is a tremendous backlog of legislation is currently being drafted the purpose of storing water south projects. He went on to say that fellow and considered that would amend the of Lake Okeechobee and storing/ Republicans have to “get their head law to include the ability of county, cleaning water with high phosphorus out of the sand” when it comes to local and municipal governments to levels before releasing it into funding transportation and “one way tax drivers or assess fees (which is Everglades National Park. The House to solve the problem is to get people currently not allowed). leadership has expressed skepticism. out of their cars and onto trains and buses.” Passenger rail from Miami to Gas tax: The General Assembly will Economic development: Governor Orlando is currently financed, but revisit the 2016 debate related to an Scott is pushing for $85 million for there are recent legal snags. Senate increase in the gas tax. The proposal Enterprise Florida to help lure new Jeff Brandes (R), Chair of the that has received the most attention is business to Florida. Speaker-Designate Appropriations Subcommittee on

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Transportation, Tourism and Economic Religious freedom: Governor Deal housing a front-burner issue. On Development, is also leading efforts in vetoed a “religious liberty” bill last year Oahu, the most populated island, support of autonomous and electric that would have done the following: (i) the city estimates that 26,000 units vehicles in Florida. protected religious practitioners and are needed, and that three-fourths organizations from being forced to of those will need to be affordable to Georgia officiate or participate in same sex those making 80 percent or less of Education funding reform: marriages; (ii) exempted faith based median income. The housing crunch Georgia last overhauled its organizations from state anti- is also believed to be contributing to state education funding formula in discrimination laws; and (iii) applied a the increased number of homeless. the 1980s and many believe it is due strict scrutiny standard to any for an update. Almost half of the state government-imposed limitations on Transportation: Horror stories budget is devoted to K-12 education individuals’ and organizations’ exercise abound from commuters traveling and the handful of attempts over of their religious liberties. Despite into Honolulu from suburban the years to get a consensus on how business groups’ concerns that such neighborhoods in central and west to reform the present formula have legislation may be discriminatory and Oahu concerning the traffic jams they come up short. Last year, Governor injure Georgia’s pro-business must endure. City officials are banking Nathan Deal convened his Education reputation, some members of the on Oahu’s upcoming, 20-mile rail line Reform Commission to design a new General Assembly vow to bring the from East Kapolei to Ala Moana to help education funding formula based legislation back again in 2017. ease the situation, but the project has on input from policy experts and the so far only produced a lot of angry broader community. The 35-person Hawaii residents as its price tag rises and commission recently published a Homelessness: Hawaii has its timetable is repeatedly pushed comprehensive report that promotes a the highest per capita rate of back. The project is now anticipated student-based funding approach and homelessness in the United to cost $6.57 billion, up more than $1 the Governor has promised to bring States and Democratic billion from just a year ago, and the legislation to the General Assembly in Governor David Ige has declared a completion date is now 2022. 2017 to enact the funding reform. state of emergency. A recent poll by the Honolulu Star-Advertiser Debate continues over the future Healthcare access: With the rising indicated that homelessness is the of Kakaako: Long known as a sleepy cost of healthcare and the growing top issue for state residents. The city’s industrial district between downtown number of uninsured patients “sit-lie” prohibition in the beachfront Honolulu and Waikiki, Kakaako has becoming matters of increasing neighborhood of Waikiki appears to taken center stage in the development concern in the state, policy leaders have pushed some of its homeless game. As construction cranes dot are in the process of considering population into shelters or other the region, many question whether a few options to expand access to areas of the island. Meanwhile state a sufficient number of the high-rise high quality healthcare through a and city leaders continue to address units will be within reach of local combination of Medicaid and other the problem with new shelters, home buyers, or if most will be luxury coverage techniques. In designing transition housing and hygiene investment properties accessible only a system that alleviates the core centers. But critics say homelessness to high-end, out-of-state buyers. problem, Georgia hopes to learn from continues to be a problem and that Statehood: Native Hawaiians continue the experience of other states while the government has not responded to disagree on the future of the mindful of the unique challenges quickly enough. and character of its own state. The sovereignty movement, or even Georgia Chamber of Commerce is Housing: Hawaii is a notoriously whether there should be one. A taking the lead, with support from expensive place to live, and with the constitutional convention in February hospital associations and other groups average price of a single-family home was fraught with conflict, concerned, in particular, with the cost now above $700,000, there appears disagreement and protests. Some of uninsured care and the impact on to be an increasing number of multi- want a “nation within a nation” model, rural healthcare. generational households across while others seek an the state, thus making affordable international tribunal.

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Idaho “when justice so requires.” This issue in return for a 401K plan; and a Education: Much of has come to the fore as a result of constitutional amendment to remove Republican Governor Butch Otto’s the proliferation of frivolous patent ambiguity in future reforms. Education Task Force agenda has lawsuits that have been plaguing Since Illinois been checked off in the last three R&D firms, such as Idaho’s Micron Workers’ compensation: has the seventh-highest workers’ sessions, but a few additional Technology. While much of the rest compensation costs in the country, proposals will likely make their of the world follows the UK’s “loser legislation will be introduced changing way into the his State of the State. pays” principle, it is largely unknown the causation standard from “any cause” The Governor and lawmakers will in America, and Idaho could be a test to “major contributing cause,” whereby likely turn a bit more attention to case for the profession, which has the accident at work must be more than higher education (e.g., completion fought it for a century or more. 50% responsible for the injury when scholarships to adults who left A staple of nearly every viewed alongside all other causes. college without a degree will likely Gun rights: legislative session in recent years, the be revisited) and workforce training, gun rights discussion this year may Tort reform: Legislation will be which have suffered steeper cuts, center on enactment of a “stand your introduced to decrease the number of proportionately, than K-12, since 2009. ground” law, which would remove the tort lawsuits filed against businesses Expect to see the education budget duty to retreat before using force in by mandating that corporations, rise by approximately 7% this year. self-defense. associations and partnerships can only be sued where the entity has an office Election laws: The Idaho Secretary or does business. Additionally, a lawsuit of State has previewed a series of Illinois must be dismissed for lack of venue legislative proposals designed to Budget: For the 2017 spring if there is not at least one defendant give more teeth to campaign finance session the Governor and who is an Illinois resident and if the reporting laws. A voter initiative that General Assembly’s priority is transaction or cause of action did not failed to get on the ballot in 2016 may to pass an agreed-upon budget that occur in Illinois. Currently, Illinois ranks be the source of inspiration for some funds state government operations 46th worst lawsuit climate for business of the draft legislation. and agencies. Both sides failed to pass a FY 2016 budget for the fiscal among the 50 states. Transportation: Joe Palmer (R), Chair year ending on June 30, 2017. While Special Session: of the Idaho House of Representatives no budget was in place during the Transportation and Defense fiscal year, more than 85 percent of Energy: A significant energy bill Committee, has indicated that he funds were automatically spent, largely benefitting two nuclear plants intends to seek more General Fund because of court orders and consent operated by Exelon was approved monies for transportation (roads and decrees. During the upcoming 2017 by both chambers and Governor bridges) funding. spring session there will be a continued Bruce Rauner (R) signed the bill into effort to pass legislation that will make law. SB 2814 (Sen. Chapin Rose, Medicaid expansion: Given the structural reforms to the cost drivers R-Champaign/Rep. Robert Rita, D-Blue uncertain future of the Affordable impacting Illinois businesses. Island) The bill would also increase Care Act in the wake of the recent investments in renewable power and presidential election, the large Pension reform: The number one energy efficiency. coalition that has been working for financial reform is the pension system. several years to expand Medicaid will Nearly $.025 cents of every tax dollar House fails to override amendatory likely assume a less prominent role taken from taxpayers goes into the veto on prevailing wage bill: this session as state lawmakers take a public employee pension system. The Following a successful override vote in “wait-and-see” approach to the issue. Governor’s legislative proposal calls for the Senate, the House failed to secure preserving and protecting all currently enough votes to override the Loser pays: In September, the state earned benefits to date; moving all Governor’s amendatory veto of SB Supreme Court ruled 3-2 that losers future employees into a tier 2 pension 2964 (Sen. Don Harmon, D-Oak Park/ in civil trials could be assessed all plan; providing an optional buyout Rep. Jay Hoffman, D-Belleville). The expenses associated with the case to reform cost of living adjustments override motion received 70 votes in

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the House, one shy of the required to lower the tax burden on residents. Kansas threshold needed for the bill to However, state revenues are coming General: The 2017 become law. SB 2964 would tether the in below projections, forcing budget Legislature will return to determination of the prevailing wage to cuts that will complicate the picture for work on January 9. All 165 legislative collective bargaining agreements when tax relief. seats were up for reelection in 2016 the agreements cover as few as 30 and, between retirements and Pressure has percent of the workers performing Water quality funding: primary and general election losses, been mounting in recent years for similar work in a locality. If enacted, the there was a 35 percent turnover of state leaders to do more to clean up bill would have the effect of inflating elected legislators. prevailing wage rates above what is Iowa’s polluted waterways and ensure actually being paid to all workers, union safe drinking water. Proposals that Budget: Kansas is looking at its’ third and non-union, performing similar would divert future tax dollars from year in a row of considerable budget work. In addition, local governments school infrastructure projects to water shortfalls. The hole is expected to be would no longer have the authority to quality efforts have been touted, but $350 million in 2017. Possible fixes determine a local prevailing wage rate. lawmakers have so far failed to settle include: (i) securitizing state tobacco on a funding mechanism. Now that settlement payments; (ii) transferring Indiana Iowa is a Republican trifecta state, the balances from the state’s unclaimed From a policy perspective, impasse could be ending. property fund to the general fund; and issues that are being discussed (iii) closing a four-year old LLC tax- After several years during the interim that will most likely Minimum wage: relief loophole that will put 330,000 of the Legislature declining to raise be legislative issues in 2017 are the Kansas business back on the tax rolls. rewrite (i.e., loosening) of the state’s the state minimum wage, currently alcohol laws, a three-tier scheme that at $7.25, a number of Iowa’s urban School finance lawsuit: A state heavily regulates distribution and sale; counties have stepped up to enact Supreme Court ruling is imminent in transportation funding; a potential tax their own minimum wage hikes. Many a lawsuit related to the Legislature’s on services; consolidation of income in the business community are calling underfunding of Kansas schools. It is tax returns; and regulation of for more uniformity, particularly in cities widely believed that the Court will rule fantasy gaming. with boundaries that span more than against the state and an additional one county with differing minimum $300 million to $500 million in K-12 Iowa wage levels. Legislators appear ready funding will be required, putting Changing political to preempt the local mandates with further strain on the 2017 budget. landscape: After capturing either a ban on local minimum wage majority control of the state Senate in mandates or a statewide minimum Medicaid cuts: Legislation will be November, Iowa Republicans will, for wage hike, but not until the issue has introduced to restore a recent 4 the first time in 20 years, control both garnered more study. percent cut to Medicaid providers. chambers of the Legislature as well The funding source is likely to be an as the governorship. Terry Branstad, Collective bargaining: AFSCME, the increase in an MCO (managed care the nation’s longest-serving governor, state’s largest employee union, is organization) provider tax. has been tapped by President-elect negotiating its contract this year, and Donald Trump to become the new US Gov. Branstad has expressed a desire Education superhighway project: ambassador to China and Lt. Gov. Kim to look at changes to the state’s Republican Governor Sam Brownback Reynolds, whom the Governor has collective bargaining laws for public recently announced an effort to work been grooming to take over the office employees. Legislative efforts in recent with consultants to determine the for a number of years, will step into the years to make changes to collective technology needs of school districts role sometime in early to mid-2017. bargaining have been predictably across the state and secure funding to contentious. This time, however, there increase broadband speeds to schools Income tax reform: With a new is little that minority Democrats can do in underserved areas. Republican majority in the Iowa Senate, to stop or slow any changes leaders have signaled that they will be Republican lawmakers might try to looking at personal income tax reforms push through.

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Concealed carry in schools: We Tort reform: A constitutional There are three different task forces anticipate legislation to repeal recent amendment for tort reform won’t be actively meeting with an expressed legislation that allows students and taken up until 2018 session. However, intent to offer up recommendations faculty to carry concealed firearms on statutory items such as creating on how to “improve” the state’s college campuses. medical review panels and reducing tax code. Many in business and judgment interest will likely be industry have anticipated that these Kentucky taken up. recommendations (most of which Kentucky’s General came in mid-November 2016 with Assembly has Charter school legislation: What a few more expected to arrive in undergone a major shift. This session this legislation consists of remains to early 2017) would include reducing represents the first time Republicans be seen, but Kentucky is one of only or eliminating many hard-fought tax have controlled both legislative seven states with no form of charter credits/exemptions that were enacted chambers, as well as the Governor’s school legislation on the books and over the past few years. office. Moreover, both Senate and this session is looking to change that. House have veto-proof Republican Examples of tax policies that are majorities. Of the 38 members of Education accountability: State expected to receive attention include the Senate, 27 are Republican, and implementation of the federal Every the state’s Industrial Tax Exemption of the 100 members of the House, Student Succeeds Act, and fleshing Program (ITEP), which has been 64 are Republican. Couple that with out assessment and accountability a major issue for manufacturers; a Republican Governor, Matt Bevin, standards for the state’s students. inventory taxes and tax credits; sales and the state is poised for major tax rates; corporate and individual Right-to-life law: To satisfy the policy shifts. income tax rates; enactment of a conservative base, there will be some professional services tax (unlikely but The focus of the new Republican form of tightening of the state’s right- possible); and elimination of the federal majority in the upcoming legislative to-life law. income tax deduction for individual session will be making Kentucky filers (could also impact small business Reorganization bills: Legislation may more business-friendly. High-priority owners), which was on the November be passed that is in line with the legislation will seek to promote job 8, 2016, ballot as a legislatively referred Governor’s vision of state government. creation and to achieve ongoing red constitutional amendment, but was tape reduction. Top priorities being Louisiana defeated and could reappear next discussed by both chambers and the spring; and many more. Tax reform: The major Governor are: issue in Louisiana in 2017 is Gas tax: The state’s Department of expected to be tax reform. Right-to-work law: Twenty-six states Transportation and Development and The 2017 legislative session doesn’t have enacted right-to-work laws in an associated general contractors are begin until April 10, and while much effort to give employees the right to promoting an increase in the gas tax can change between now and then, maintain employment without having by anywhere from $0.20 to $0.30 restructuring the state’s tax code is to pay for any part of the cost of union ($0.384 to $0.484when factoring in the top priority for both Democratic representation. Kentucky wants to do federal rate) or even higher depending Governor John Bel Edwards and the same. on the proponent. This will be a many legislators. It’s worth pointing very complicated issue considering out that recurring budget deficits Prevailing wage law: The state seeks Louisiana’s legislature, with urging have become the norm over the past to repeal its prevailing wage law, which of the governor, increased the state five years in the state. It’s also worth applies to state-funded construction sales tax on all purchases by a penny noting that the 2017 legislative session projects with the goal of increasing this spring in addition to suspending is fiscal-only in nature, meaning efficiency of public investments and a litany of tax exemptions, credits and bills must deal with tax credits, reducing the cost of government. exclusions. In other words, Louisiana’s exemptions, exclusions, etc. (although tax burden continues to increase and each member may introduce up to many wonder whether the tipping five non-fiscal bills apiece). point has already been reached.

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Coastal lawsuits: Gov. Edwards plans Budget/taxes: The past four years respected and that there should not to step up the fight to win damages have seen very contentious battles be alterations to the rollout of the from oil and gas companies for their between the executive branch and referenda. The Governor has also role in damaging Louisiana’s wetlands the four caucuses, with the House expressed reservations about issuing over many decades. Dubbed by many Republicans historically siding with a proclamation legalizing recreational as a trial lawyers bonanza, it is likely the Governor initially. Though the marijuana, as required of him by that a handful of bills will be filed to budget is in its preliminary stages, Question 1, indicating that he believes curtail these suits against oil-and-gas the Governor is likely to propose his oath to uphold the US Constitution companies operating in the state and significant cuts to the state workforce, precludes him from enacting a law along its coast—or to at least tighten possibly attempt to reduce Medicaid that the citizens approved but that up language on whether contingency spending, and seek to reduce the may be against federal law. This fee contracts are lawful. income tax on the states’ top earners. matter remains unclear at this stage, Voters passed a referendum that though most observers believe the Maine places an education surcharge tax on law will be implemented, subject to Governor Paul LePage: As incomes over $200,000 and it is likely some changes this session. the Republican Governor that the Governor and Republicans begins the final two years of will seek to alter the implementation Medicaid expansion: For the past his second term, speculation continues of this referendum and/or focus on two sessions Democrats and a small that he is contemplating running for reducing the tax burden on those that group of moderate Republicans have the US Senate against Angus King, earn more than $200,000. Maine has attempted to expand Medicaid in the the state’s first independent senator. a biennial budget and typically has state, but the Governor has Although he has been a controversial the two-thirds majority of both bodies consistently vetoed these bills and is figure, the Governor’s poll numbers needed for enactment in time for the likely to do so again should such a continue to show strong support start of the new fiscal year. Majority measure reach his desk in the among his base and moderate voters. budgets passed 90 days in advance upcoming session. A progressive He also maintains strong support of the conclusion of the fiscal year advocacy group collected enough among the House Republican caucus, are almost unheard of so cooperation signatures this past election day to put but his relations with the Senate among the Legislature’s partisan Medicaid expansion on the ballot in Republican leadership are less solid. caucuses at the end of session 2017 or in 2018. However, the typically sidelines the Governor when advocacy group stated that before Legislature: The November elections the final budget is negotiated. having the signatures certified by the saw the majority Republicans in the Secretary of State, it was waiting to Maine Senate lose two seats but Referendum questions: During see what, if any, expansion attempts maintain their majority. Incumbent the swearing-in ceremonies on will be made by the Legislature Senate President Mike Thibodeau and December 7, 2016, the Governor this session. his leadership team continue as the took the opportunity to recommend leaders with their 18 member caucus. that the Legislature change the Maryland Minority Democrats (17 seats) elected implementation of three of the Gov. Hogan‘s Troy Jackson, a labor Democrat, enacted referenda. The Governor popularity as leader and Nate Libby, a more claimed that Question 2, a surcharge continues : As moderate official, as the assistant. At tax for educational funding, will he enters the third year of his term, the House end, Democrats retained damage the economy by driving away Republican Governor Larry Hogan‘s control but lost several seats; they now high earners, such as doctors and approval ratings continue to soar in hold 77 seats, with Republicans elected lawyers. Similarly, he wants to change this majority-Democratic state. An to 72 seats, and 2 unenrolled members. implementation of Question 4, a OpinionWorks poll in September Rep. Sara Gideon was elected Speaker minimum wage increase, his concerns found a staggering 71 percent of the House and Republicans re- being both the amount of increase of registered voters approve of elected their leadership team, Rep. and the tipped wage credit portion. his job performance, the highest Ken Fredette as leader and Rep. Elsie Democrats have publicly stated number achieved by a Maryland Espling as assistant. that the will of the voters should be chief executive since 1998. The

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Governor has remained focused Transportation: The harsh winter of building solar energy projects, on the economy-driven agenda of 2015 crippled the Massachusetts developing offshore wind farms, (e.g., improving the state‘s business Bay Transportation Authority (MBTA), importing hydroelectric power from climate, reducing taxes and reducing the Boston area’s aging public transit Canada and building new natural gas government spending) that propelled system, calling attention to its massive pipelines. Questions include: How his upset election in 2014. The backlog of maintenance needs. Audits much should the state be subsidizing Governor did not endorse nor vote for of the system over the past year have solar energy development? How does President-elect Trump. revealed a host of management, labor the state balance the need for low-cost and financial problems. Meanwhile, the energy with the environmental impacts Legislative leaders poised to pursue state’s snowy climate means its roads of fossil fuel energy generation? progressive agenda: Senate and bridges also need regular upkeep, What is the right location for new President Miller and House Speaker and money is always in short supply. energy infrastructure? Busch are expected to be pressed by Attempts to generate new tax revenue their respective caucuses to pursue an for transportation have failed multiple Education: Massachusetts has “aggressively progressive“ agenda. times, either in the Legislature or at the some of the best schools in the The House Democratic Caucus, in ballot box. For now, state officials are nation. But there remains a persistent particular, is considering a progressive, working to reform the public transit performance gap between rich and albeit still largely undefined, agenda to system, and fare increases are likely. poor students, and between white serve as a contrast to Governor Hogan and minority students. A handful and the incoming Trump Healthcare: Massachusetts, which of urban schools are consistently administration. Leadership changes has some of the nation’s leading deemed underperforming. As a are anticipated in the House, and hospitals. was the first state to offer result, Massachusetts is embroiled in certain Senate committees could have near-universal healthcare coverage, a debate: Does the state need more several new members due to implementing an individual mandate in charter schools or not? Should more members either retiring from the 2006. But the state has not been able money be invested in the traditional Legislature or being elected to to curb the growth of healthcare costs, public schools? How does the state other offices. which for years have been among the help the lowest performing schools? nation’s highest. The continuing high Are there more effective ways to use Massachusetts cost of Medicaid alone, is hitting the existing resources? With a limited Opioid addiction: In pocketbooks of state residents and amount of state money available to 2004, fewer than 500 punching a growing hole in the state spend on education, these issues are people died of unintentional opioid budget. While Massachusetts has pitting teachers’ unions against charter overdoses in Massachusetts. By 2014, passed laws aimed at curbing costs school advocates, both of whom want the number had more than doubled. through increasing transparency, a bigger share of the pie. Victims of drug overdoses are black, improving technology and moving white and Latino; old and young; toward new payment methods, it’s still Legalization of marijuana: from the cities and suburbs. The too soon to tell whether these efforts Massachusetts has historically state Legislature and two successive will be effective. been one of the more progressive Governors have been taking steps states on marijuana policy—in 2008, to curb the growing problem of Energy/environment: Energy prices in decriminalizing the possession of prescription painkiller addiction, which Massachusetts are among the highest small amounts and in 2012, legalizing is also a gateway drug to heroin use. in the nation – hurting residents and medical marijuana. The state’s first Among other efforts, the state has businesses—and the problem is only medical marijuana dispensaries added treatment beds, launched expected to get worse with the closure opened in 2015. This past November, public awareness campaigns, of coal-fired and nuclear power plants voters approved a ballot measure to implemented new mandates for limiting supply. Massachusetts has legalize recreational marijuana—over insurance coverage and created been trying to cultivate new sources the opposition of the state’s most education requirements for medical of clean energy. But potential projects powerful politicians. and dental students. have gotten hung up by political debates over the merits and pitfalls

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Michigan taken care of for life without having to Minnesota Medicaid reform: As the sue or go bankrupt. For this benefit, Minnesota’s 90th Trump administration and Michiganders pay about $150 per car legislative session congressional Republicans per year added to their insurance bill. will begin on Tuesday potentially move forward with For the past six years, the insurers and January 3 with the swearing in of “repealing and replacing” Obamacare, the Republican House have, to no avail, all 201 members of the Legislature. the now-more-conservative Michigan been attempting to change this law to The primary goal for the odd-year House of Representatives is the benefit of insurance companies by session will be the establishment of contemplating how it will change the implementing caps and fee schedules, the budget for the FY 2018 to FY 2019 state’s Medicaid program. Last session, among other things. The new Speaker biennium. In early December, the the Legislature approved changes of the House has stated that he will Commissioner of Minnesota’s Office of that added over half a million people continue to pursue changing the state’s Management and Budget announced to the program, providing them with no-fault law. the state will have a projected budget health insurance they didn’t have prior. surplus in the next biennium of $1.4 Attempts will The new House leadership has talked Presumptive parole: billion. The Legislature and Governor once again be made by conservatives about how to make that program more have been unable to reach an and liberals alike to change the parole accountable. We anticipate attempts at agreement over the past two years on system in Michigan for prisoners making changes. the Omnibus Tax and Transportation that meet certain benchmarks finance bills, so the state will have an when their minimum sentences are Budget: Michigan is facing a budget additional $678 million available in served. Michigan Attorney General shortfall next session of about one-time money during the upcoming Bill Schuette and other justice hawks $300 million. Coupled with a very session. The state also deposited continue to attack this effort as soft on conservative House, this could make $334 million into its budget reserve, crime. Large political donors from both for some interesting budget cuts. leaving nearly $2 billion in additional parties are beginning to take this issue Schools will likely be left alone but the state savings. two biggest budget areas—Medicaid on from a compassionate and state and Corrections—will likely be areas to budget savings point of view. Expect a While establishing the budget will target. Even if the revenue-estimating push on this issue hard next year. be the primary goal this session, conference slated for next month state legislative leaders have also The overall state issue of shows better than currently predicted, Tax credits: announced a number of additional whether a government should pick they are likely to look for places to trim priorities. Many of these are issues the winners and losers will be debated next state government. Two other areas Legislature and Governor were unable year. Governor Rick Snyder started his often spoken about are Pure Michigan, to reach an agreement on during the administration opposing tax credits but the state’s tourism promotion program, 2015 and 2016 sessions. over the past six years been less and the state’s Economic Development strident on the issue as big Council. There is a philosophical Healthcare reform: Minnesota’s developments make overtures to come rub between conservatives and the state-run healthcare exchange is to Michigan with the right incentives. appropriate role of government and experiencing some of the highest The conservative House Republicans this is never more evident than state rate increases in the nation for have been talking like they will take a promotion to tourists and developers. 2017. The Governor and members hard look at these incentives and what However, Republican Governor Rick of the Legislature attempted to the role of government should be. In Snyder does not share these hardline find a solution in hopes of holding particular, developers in Detroit are conservative values, thereby setting up a special session in December. working to put that city back together an interesting budget showdown. Negotiators were unable to reach and make it proud again, but are an agreement, thus any reforms are Auto no-fault: Michigan has the most insisting incentives are an important likely to be dealt with early in the generous auto accident benefits in part. This debate will get started early upcoming session. The Governor the country. If you are catastrophically next year. has proposed a plan to take more injured in an auto accident you are than $300 million from either the

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budget reserves or the state’s Health Omnibus tax and bonding bills: For Deadline: The legislature must Care Access Fund to provide a 25 two years, the state Legislature and complete its work by the percent rebate to all customers in Governor Mark Dayton have been constitutional deadline of the exchange who fail to qualify unable to reach an agreement on May 22, 2017. for federal tax credits. Republicans a comprehensive tax bill. In 2016, a have been skeptical of the one-time bipartisan group of legislators passed a Mississippi fix. They have also raised concerns broad tax bill, only to have the Governor Mississippi’s 2017 legislative about how the exchange is being veto the measure as part of his effort session starts January 3 and managed and the caps on the number to force a special session where a runs for approximately 90 of insureds which the Department bonding bill and other gubernatorial days. This is the second year of a four- of Commerce has allowed health priorities could be renegotiated. House year term for Republican Governor Phil insurers in the exchange. These caps Republicans tried to move a nearly $1 Bryant, Republican Lt. Governor and have created pockets throughout billion bonding bill in the final minutes President of the Senate Tate Reeves, the state where exchange users are of the 2016 session, only to have the bill and Republican Speaker of the House unable to find a plan with providers die in the state Senate. While bonding Philip Gunn. in their area. Republicans, who will would typically wait until the even-year control both bodies in the upcoming session, it is possible a bill could be part Taxes/budget: Legislative leaders in session, are unwilling to accept of a session ending compromise, linked Mississippi spent the summer and fall any proposals that fail to address to the Republicans hopes of having a examining major agencies’ budgets continuity of care issues. tax bill become law. as well as the tax code. The state’s tax collections are struggling to keep up Transportation: When the Legislature Other issues to watch: with even-tempered expectations, began its work in 2015, all four State-wide labor standards and the governor has already legislative leaders and the Governor (preemption): A business community instituted some budget cutting for claimed the two years would be a priority to prevent cities from adopting the fiscal year that began July 1. failure without a comprehensive minimum wage, scheduling or paid- Lawmakers are scouring agencies, agreement on transportation funding. leave ordinances. asking questions about mission and Disagreements on funding light-rail, process; and “working groups” have specifically whether to use existing VOIP: Telecommunications industry twice heard from the conservative Tax tax revenues or to increase gas and priority to address regulatory Foundation, which has recommended sales taxes, derailed any chance of uncertainly of VOIP services more reliance on sales and uses reaching a global agreement. With the and products. taxes and the elimination of some state Senate now under GOP control tax exemptions. Legislators will also in 2017, the Governor’s negotiating Liquor off sale: This is likely the year the make decisions on the apportionment position and support for an increase Legislature repeals the decades-long across the state of BP Oil Spill in the gas tax have both diminished. prohibition Sunday sales at liquor stores. settlement funds, including whether Republican legislative leaders have a trust fund should be set up for the indicated an interest in passing a June primary: With the leaders of both Mississippi Gulf Coast counties. funding bill similar to one proposed major political parties behind moving by the House in 2015, which would the state’s primary to the month of May Education funding: Lawmakers have capture revenues from the sales tax from its current August, the effort will brought in EdBuild to examine the generated through the purchase gain momentum this session. state’s 20-year-old education funding of auto repairs, parts and services. formula. Known as the Mississippi Uber/Lyft regulations: Minnesota The Governor and DFL (Democratic- Adequate Education Program, the adopted some minimal regulations of Farmer-Labor) Party leaders are formula has been fully funded only alternative transportation providers in concerned about the plan’s lack twice since its inception. Leaders 2015; however, recent investigations of a constitutional dedication say they want to ensure a focus on have raised local concerns of these funds. classroom dollars and rewarding about how these companies are performance. The issue is likely to be operating in Minnesota. politically polarizing, with Democratic

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minorities defending the existing Electricity drain: Montana exports Nebraska formula and Republican majorities much of the electricity generated in Budget/taxes: An pushing for change. Colstrip, a series of coal-fired power almost $900 million generating units, the state relies on budget shortfall for the 2017-18 The Mississippi Highway funding: Colstrip for employment and taxes. and 2018-19 biennial budget is the Economic Council—the state’s One of the state’s largest refineries Legislature’s highest priority this chamber of commerce—is calling for depends on electricity generated at session. Nebraska has a constitutional additional dollars focused on highway Colstrip and the refinery manager is requirement for a balanced budget. and bridge maintenance. The MEC concerned how he will get affordable, The Governor has stated a desire says an additional $300 million-plus a reliable energy if the federal Clean to lower corporate and individual year is needed. Lawmakers are Power Plan, in combination with the income taxes and most Nebraskans, searching for solutions amid concerns actions of the Oregon and Washington particularly those in the agriculture over raising new taxes and a legislatures to begin moving away sector, want lower property taxes. To slowdown in existing tax collections. from coal-fired generation, results in offset those losses in revenue, state Colstrip’s closure. Missouri senators are discussing broadening the sales tax base by eliminating some Despite a very contentious From the Endangered species: exemptions. Education funding is and expensive election year sage grouse to the grizzly bear, always part of this discussion. in Missouri, the General Assembly endangered species are almost always remains controlled by Republican a top issue in Montana. The state Corrections: Investment needed to supermajorities in both chambers. As avoided a listing of the sage grouse stabilize safety and capacity concerns, such, it is expected the leadership in on the endangered species list when ensure proper sentence calculation, both chambers will continue to push the federal government agreed to and provide programming and mental an agenda that appeals to their base allow lawmakers to pull together health care to ensure safe reentry. The and caucus members, including right stakeholders to protect its habitat. state’s death penalty was repealed to work, tort reform, creating But the issue is being litigated. On by the Legislature last session, statewide ride-sharing regulations and the flipside, the federal government but was reinstated by the voters striking a compromise between is moving toward delisting the grizzly in November 2016. utilities and rate payers. bear, though bear advocates say it’s too soon. Regardless, this issue Professions: Push to ease Montana impacts agriculture, natural resource regulatory and licensure burdens Natural resource extraction, hunters and shooting on professionals. Legislation to downturn: The number sports enthusiasts, and others who ease regulations on health care one issue in the state is the downturn come to states like Montana for its professionals, insurance agents and in the natural resource extraction wild spaces and wildlife. other licensed professions is likely. industry—coal, oil and natural gas—and the economic impact on the Montana Veterans issues: For a state with just Technology: Efforts to update economy, jobs and tax base. Coal over a million people, Montana has a statutes, where needed, to make companies are declaring bankruptcy, high number of veterans per capita. It e-commerce a part of how the state coal production is slowing and coal also has a high suicide rate, generally, does business and to make the state workers are being laid off. Montana and there’s concern among political better able to adapt communities that experienced a leaders on how to provide healthcare, to new technologies. surge in population and are struggling including mental health services, to to accommodate the rapid influx veterans. The state’s large land mass New Hampshire are feeling the impact. Politicians and sparse population make it difficult Budget challenges/taxes: New are blaming the US Environmental for veterans to access services. Hampshire operates on a two- Protection Agency, the Washington and year budget and the budget will be Oregon legislatures, environmentalists the main focus of the 2017 legislative and others concerned about climate session. For the first time in 14 years, change for the slowdown. the state will have a Republican

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Governor, Chris Sununu, and he will New Jersey revenues lost from tax breaks that were have a Republican controlled House Just as the nation is settling approved as part of the plan to raise and Senate to work with. It is likely that down from the tense presidential the gas tax to replenish the State’s no new taxes will be passed and that election, New Jersey is gearing Transportation Trust Fund last year. An certain existing business taxes may up for its 2017 gubernatorial and approved spending plan for the next very well be reduced. legislative elections. All three chambers fiscal year is constitutionally required to are up for grabs as the Democratic be in place by June 30. With all 120 In addition Medicaid expansion: Party battles to hold on to its majority. seats up for election, the full-time to the budget, New Hampshire’s Two-term Republican Governor and Legislature is expected to take an Medicaid expansion program is set former presidential candidate Chris extended hiatus from July until after to sunset in 2018 and the Governor- Christie enters his final year with Election Day in November. elect as well as House and Senate record-low approval ratings and a failed Leadership have suggested that a backroom deal to change an existing New Mexico pathway for reauthorization will be law that is preventing him from cashing Budget: The state worked on over the next biennium. It is in on an undisclosed book deal. anticipates a $69 million unclear at this point if this will happen budget deficit at the end during the budget debate or if the The 2017 Democratic gubernatorial of this fiscal year. For the fiscal year leadership will choose to work on it primary has started, with retired starting July 1, 2017, state budget outside of the budget. Goldman Sachs executive and former experts project $300 million in US Ambassador to Germany Phil new budget cuts. This follows an The Right-to-work legislation: Murphy the party’s frontrunner. Other across-the-board 5 percent cut to all Governor-elect and the House and declared Democratic gubernatorial agencies as part of a legislative plan Senate Leadership have identified hopefuls include Assemblyman John to shore up a $600 million deficit from passing a right-to-work law as one of Wisniewski; former Under Secretary last year’s budget. The plan, which their top priorities this session and bills of the Treasury in the Clinton was hammered out during a special have already been introduced. While administration Jim Johnson; and legislative session in September 2016, the Senate bill is likely to pass, the political newcomers Monica Brinson including a combination of budget 400-member House could prove to and Titus Pierce, according to New cuts and tapping into state reserves. be a challenge. Jersey’s Election Law Enforcement Commission. The 2017 declared Education: Following the state Gun legislation: Senate majority Republican gubernatorial candidates Legislature’s conversion back to a leader Jeb Bradley has introduced include Assemblyman Jack Ciattarelli Democrat majority, and the already legislation to repeal the concealed and businessman Joseph Rudy Rullo. Democratic-controlled Senate picking carry license process that currently Other potential Republican candidates up a few additional seats, the yearly exists in New Hampshire in favor of include Lieutenant Governor Kim fight over tapping the Land Grant “constitutional carry” that has been Guadagno, who is serving as the state’s Permanent Fund (LGPF) to fully fund adopted in other states. This first lieutenant governor and also as its early childhood education is gearing up legislation passed the House and secretary of state. for the long (60-day) session that starts Senate during the last legislation in January. While Governor Martinez session, but was vetoed by Governor The Legislature is expected to take has indicated that the LGPF, one of the Maggie Hassan, who is now heading up major healthcare-related bills in largest funds of its kind in the country, to the US Senate. Governor-elect 2017. Among the most contentious is a is off limits to resolve any deficits, let Sununu has indicated he will sign the measure to rein in skyrocketing out-of- alone for other purposes, Democratic bill but, again, it must pass the network costs that is being advocated lawmakers are hopeful that, through 400-member House, where the by the state’s insurance industry. The constitutional amendment, they’ll Republicans hold a 26-vote majority. administration and legislative leaders be able to move closer to their long- will have a challenging budget process standing plan to distribute more this year as they seek ways to offset money from the fund to pay for early childhood education initiatives.

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Medicaid cuts: Due to previous on December’s horizon. Governor Redrawing of legislative maps and legislation that underfunded the Cuomo, along with Assembly Speaker an election do-over: A US federal state’s Medicaid program by $85 Carl Heastie and Senate Majority court ruled in November that North million, there was a significant Leader John Flanagan had been Carolina must hold special elections decrease in federal matching negotiating, with limited success, a in 2017 to rectify unconstitutional dollars. This finds the state having deal whereby the Legislature would racial gerrymandering of the state’s to cut Medicaid spending by an pass a number of the Governor’s legislative districts; legislators estimated $400 million. Nearly one legislative priorities in exchange for elected in November 2016 from the third of New Mexicans are currently the first legislative pay raise since affected districts will have their terms enrolled in Medicaid. 1999. Included in the Governor’s wish shortened from two years to one. The list were changes to oversight of the state has until March 15 to submit a Crime: Following the Governor’s lead state procurement process, an anti- new redistricting plan or it will lose the of getting tougher on crime, there hate crimes task force, funding to right to draw its own maps. Primaries have been a number of bills pre-filed address the homeless crisis in New for the special election will take place that make for harsher penalties for a York City and legislation that would in August or September and the variety of crimes, including DWI and expand ridesharing services like Uber general election in November. State reckless driving, illegal possession to Long Island and Upstate New York. legislators elected in the 2017 special of firearms and child abuse. One election will also serve one-year terms. particular crime-related black eye for Beyond the special session discussions, It is currently unclear whether all 120 the state is the 5,440 untested sexual the Governor announced in November House and all 50 Senate seats will be assault evidence kits that are sitting in a $650 million life sciences initiative on the ballot in the fall, or just those backlog, the worst in the nation. There aimed at creating an industry and whose district is changed as a result of has been a bill pre-filed that would research “cluster” in New York state. the realignment. allocate additional funding to address The initiative will provide $250 million the backlog. in tax incentives for new and existing Tax reform continuation: In 2013 life sciences companies to expand the state’s Tax Simplification and Business: The various associations research and development in the state; Reduction Act became law. Personal that represent corporate interests in provide $200 million in state capital and corporate tax rates were reduced the state will seek to protect and grow grants over a 10-year period; and and the base expanded by adding to incentives, especially for businesses allocate more than 3.2 million square the list of taxable services. Meanwhile, that choose to locate an office within feet of space and 1,100 acres of refinement of tax credit programs, the state. One oft-touted success developable land, tax free, to corporate tax policy, sales tax story is a Facebook data center that accelerate life sciences innovation. The distribution, etc., will continue in the opened in Los Lunas that employs effort will also provide $100 million in coming session. more than 50 locals and utilizes the investment capital for early-stage life services of half a dozen vendors. One sciences initiatives, which will be Pension reform: Newly elected State particularly important area of tax matched by at least US$100 million Treasurer Dale Folwell has made it his incentives applies film, TV and video from the private sector. More on the life’s mission to tackle the unfunded games that are created and filmed in governor’s initiative can be found in our liability of the state employees’ health New Mexico. A healthy number of client alert (hyperlink). plan and pension fund. Both are facilities and professionals have underfunded, but the promise of developed around the film industry. North Carolina lifetime health care coverage to retired Legislative long state employees in particular threatens New York session convenes on to overcome the state’s ability to pay The late fall, generally a January 11, with formulation of the for education, healthcare, infrastructure very quiet time of year biennial budget the major task for the and other needed services. Reform for state politics was slightly more Republican supermajorities in both legislation will be debated this year. interesting with the prospect of a chambers. Other issues that will be special legislative session looming considered are:

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Relationship between a GOP Oil prices and production: A more tax in an attempt, as best he can, to Legislature and a Democratic than one-year decline in oil prices has fulfill a campaign promise to repeal Governor: During a “surprise” special resulted in a slowdown in oil activity or greatly reduce that tax. In addition, session in December, two bills were in North Dakota but no significant education funding and school choice passed that diminished the authority of decline in production. The state’s will be high on the budget priority list. incoming Democratic Governor Roy recently revised budget revenue Cooper by enabling the Republican- forecast has the state maintaining one Medicaid: Ohio must replace $1 billion controlled legislature to further assert million barrels of oil per day for fiscal dollars in revenue for the Medicaid its constitutional power as the year 2016, before dropping below that system due to a decision from CMS dominant branch of government. mark early next year and averaging throwing out the tax charged to HMO Beginning immediately, the Governor’s 900,000 barrels per day for fiscal year plans doing work in the Medicaid cabinet appointments must be 2017. Over the past year operators space. This revenue might take the approved by the Senate and the have gone through multiple rounds form of a more generalized tax, number of employees who serve at the of layoffs, cut costs and improved other tax options and/or franchise Governor’s pleasure will be cut from efficiencies. In February, the state’s fees for hospitals. In addition, as a 1,500 to 425, reversing an expansion active drilling rig fell below 40 barrels Medicaid expansion state, Ohio will be that legislators approved for the for the first time since mid-2009. looking for guidance from the Trump Governor’s predecessor, Pat McCrory, administration and Congress on at the start of his term. Clean Power Plan impacts: changes to the ACA. Promulgated in August 2015, EPA’s North Dakota Clean Power Plan, the nation’s first- Transportation: There has been some The North Dakota ever national carbon pollution discussion of “revenue enhancements” Legislature meets in standards for power plants, could to fund some long overdue full once every two years. Interim have major impacts on North Dakota, transportation projects. Whether the committee hearings from the 2015- but state officials are waiting to see conservative General Assembly will go 2016 session continue, but the next full how court challenges play out before along with such plans is unclear. session, the 65th Legislative Assembly, continuing work on a compliance will convene on Jan. 3, 2017. plan. A US Supreme Court decision Oklahoma halted implementation of the rules Governor Mary Fallin, Budget: North Dakota was forced to pending judicial review, which has who is in her second plug a more than $1 billion budget gap given the state a reprieve, officials say, term, begins her last two years in in February 2016, a reversal from several from its unfair and harsh requirements. office with her approval ratings years of increased spending and record The original requirement gave North standing at under 50% for the budgets. Republican Governor Jack Dakota until 2030 to reduce carbon first time since taking office. She Dalrymple ordered all state agencies dioxide emissions by 11 percent from continues to be mentioned for a that receive general fund dollars to cut its 2012 levels and the final rule position in the Trump administration their expenditures by 4.05 percent. increased the emissions reduction and the nomination of current The cuts, which totaled about $245 target to 45 percent, which could Oklahoma Attorney General Scott million, were the largest ever ordered result in the closure of multiple North Pruitt to head the EPA could be a by a North Dakota governor. The rest Dakota coal-fired plants. help. If Fallin leaves, Lt. Governor of the budget gap will be filled by state Lamb would move up and appoint his rainy day fund dollars, and carryover Ohio successor and any other offices that cash from the state general fund’s Budget: A two-year budget may open after that. ending balance. Nearly 70 percent will be introduced in early of the shortfall comes from declining February. Governor Kasich is already Legislative makeup: The Oklahoma sales tax collections, a large portion warning that diversionary spending Legislature is beginning its third of which is tied to energy production will be nonexistent as tax revenue is generation of term limits, which in the western part of the state. far below anticipated levels heading began in 1992 with 12 years allowed Lawmakers are expecting a fairly flat into 2017. That said, the Governor is in both chambers. The second state budget in 2017. still considering cuts to Ohio’s income generation started in 2004 and the

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2016 election marked the begin of but details have not been released. decision doubled the projected the third. There are 101 members of Projects already permitted and under liability of Oregon’s system to at least the House of Representatives and construction would be grandfathered $18 billion spread over the next few 48 members of the Senate with at a minimum is our understanding. decades, most of it to pay benefits to 24 senators up on each general public workers hired before the election. A total of 125 seats are up Seismicity is also a big issue in the system was overhauled in 2003. for reelection and 92 of them are energy arena right now, with calls for Pension contribution rates for state contested, including 73 in the House the regulation of waste water injection and local agencies are forecast to and 19 in the Senate. wells, which are getting the blame jump from 18 to 30 percent of payroll for a magnitude 5.8 earthquake—the costs in the next few years, starting in The makeup of the new House is 75 largest in state history—over Labor 2017, which could result in higher Republicans and 26 Democrats. The Day weekend in 2016. taxes or reduced spending new speaker is incoming Rep. Charles for other purposes. McCall from Atoka, a banker by Budget: Looking into 2017, the budget profession and a very sharp person to will again be the main topic—from Pennsylvania serve as speaker. how to fill a $900-million hole from Budget: The one-time money being used this year, Pennsylvania The Senate will be made up of 42 to the always-fraught issue of teacher Legislature returns to Republicans and 6 Democrats with pay and public school funding. session in the third week of January former majority floor leader Mike Transportation and infrastructure for the start of a two-year legislative Schulz replacing President Pro money will continue to be funded by session. Governor Tom Wolf (D) Tem Brian Bingman, who is leaving dedicated revenue and not subject to unveils his 2017-18 fiscal budget in because of term limits. Schulz is a possible budget cuts. Revenues are early February; his third proposed rancher/farmer from Altus who was seeming to stabilize as budget since taking office. As in years first elected in 2006 (and term limited oil prices recover. past, he faces a significant structural in 2018) and will be a good leader of budget deficit. In his prior two budget this chamber. Oregon proposals, Wolf proposed increases Funding of roads and in personal income tax rates and Energy and environmental issues: bridges: Lawmakers in sales taxes with respect to both Oil and natural gas prices are the agree that more money rate and base. These tax increase state’s biggest issues as they affect needs to be raised for transportation proposals were largely rejected by its budget in a major way and when projects. The most recent major the Republican-controlled legislature. they are down, as they are now given funding package was approved Wolf is expected to again propose the current market, tax credits and seven years ago. Congressional some form of increased taxes to other tax incentives to the energy approval last year of a five-year address the budget deficit. In addition and environmental products and federal spending plan will generate to the budget, which has a June 30 services industries come under high only modest improvements for deadline for enactment, the following scrutiny for return on investment, Oregon. Roads and bridges are issues will likely be on the legislative with wind tax credits likely to get the aging, particularly in the Portland agenda in 2017. most intensive going-over. The oil and metropolitan area, where traffic natural gas industry trade associations congestion has worsened in Pensions: Pensions remains one of are very active in protecting their own recent years. the largest cost drivers in the fiscal incentives and will be trying hard to budget. Last year the legislature promote greater use of their products Pensions: The state Supreme Court considered several proposed reform over cleaner-burning alternative fuels, largely nullified lawmakers’ 2013 effort bills before ultimately failing to enact a strategy that actually plays well in to pare future cost-of-living increases any reform proposal. Opposition Oklahoma. The wind industry seems for public retirees when it ruled, similar from public sector unions has been a to have found a solution that it can to courts in other states, that such major roadblock. support in the next session as it relates reductions could not be retroactive. to the construction of wind farms With the stroke of a pen, the 2015

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Medicaid: The state has implemented Rhode Island Highway funding: South Carolina has Medicaid expansion as part of Legalization of marijuana: not raised the gas tax since 1987 and the ACA and is in the process of Although Rhode Island the business community will lead a implementing Medicaid managed lawmakers declined to renewed effort for a gas tax increase care across Pennsylvania. Like most legalize recreational marijuana last for road funding in 2017.The General states, Pennsylvania is waiting to year, now that Massachusetts voters Assembly has transferred general see what happens to the ACA in have gone down that path, Rhode fund dollars and issued bonds for road the 115th Congress. Island legislative leadership are repairs and expansion in two of the eager to follow. Last year’s proposal last four legislative years to generate Public education funding Education: to legalize marijuana, and regulate nearly $2 billion in funding. Governor remains a priority for Governor and tax it like alcohol, attracted more Nikki Haley has vowed to veto any Wolf. His administration is not support in the state Senate than in gas tax increase that does not have a considered a friend of the charter the House, where lawmakers were corresponding income tax reduction. school community. reluctant to back it in an election year. A special joint But House Speaker Nicholas Mattiello Pension reform: Pharma drug pricing transparency: subcommittee of the state House and signaled at the time that the chamber Legislation and hearings are expected Senate has been established during might take action early in 2017 if to be pushed by the health insurance the offseason to study and make Massachusetts’s voters voted for it. industry in 2017. recommendations on the more than Jobs: Rhode Island’s economy has $21 billion unfunded liability of the Autonomous vehicles: Auto continued its slow recovery from the state retirement system. The General manufacturers are expected to push Great Recession of 2007-09, but it has Assembly will devote a significant proposals for adoption of rules and yet to regain its pre-Recession level of portion of the legislative year to working regulations to allow for expansion of employment. While it’s no longer one on forestalling this looming crisis. autonomous vehicles in the state. of the top five states with the highest With record unemployment rates, many residents Workforce development: Liquor sales reform: The Legislature high employment (2.1 million South feel they remain left out of the made great strides in 2016 to begin Carolinians are working) and very low progress that has been made. moving Pennsylvania away from its unemployment, employers are facing Democratic Governor Gina Raimondo, state run liquor system. More changes challenges to find skilled workers. The who took office in 2014, has are expected. General Assembly will likely consider responded with a multi-pronged proposals from Governor Haley and Severance tax on natural gas approach to economic development others to begin addressing the skills extraction: Governor Wolf has sought that includes incentives and skill- gap, the primary focus being on this in each of his first two years in training, and the state was a surprising advanced manufacturing, healthcare office. This could be the year. finalist for General Electric’s new and information technology needs. corporate headquarters (it’s going to Telemedicine: Rules governing Boston). That said, the state’s efforts to Gun restrictions: A special state provision of telemedicine services overcome years of economic Senate subcommittee is holding will be considered in 2017. Expect a underperformance will be an ongoing public hearings on whether new gun fight between insurers and doctors on process for many years to come. restrictions are necessary in the wake of payment issues. South Carolina a number of law enforcement, school and church shootings in the state. The Opioid abuse: Efforts to address the State budget: The South subcommittee will make proposals opioid abuse epidemic will continue in Carolina general fund has that could include more extensive 2017 with more treatment dollars and had a surplus of more than $1 billion background checks and longer waiting prescription guidelines debated. in each of the last two fiscal years. periods before purchasing guns. However, current revenue forecasts show a dramatic slowing, with little Medicaid expansion: Healthcare to no new funds available for the groups will again make an effort to 2017-18 budget. expand Medicaid under the ACA, but 102 dentons.com US Policy Scan I 2017

with little-to-no new money in the state legislative task force that is working Governor Dan Patrick and Speaker of budget and widespread opposition on a revised plan to be taken up for a the House Joe Straus asked agencies to to expansion, ranging from Governor vote during the upcoming session. pare their upcoming budget requests Haley to numerous legislative leaders, by 4 percent. The current 2016-17 any proposals face an uphill climb. Highway funding: Tennessee has state budget totaled $209.4 billion. not raised its gas tax since 1989 and Lawmakers left $4 billion unspent Campaign finance reform: During currently has a $6 billion backlog in when they wrote the current budget. the current election cycle, numerous road construction projects. A gas tax Much of that will be soaked up by members of the General Assembly increase and fees on electric/hybrid transportation, Medicaid and teachers faced political attacks from “dark vehicles are likely to be proposed. and other public employees’ retirement money” sources. The Legislature will costs. Additionally, the state’s rainy day likely consider options on how to reign De-annexation: Lawmakers will fund contains about $7 billion unspent, in unlimited political spending, likely consider a bill to allow certain but in recent years lawmakers have balancing any legislation with the communities that were previously been reluctant to tap those funds for Citizens United opinion. annexed to implement a referendum ongoing expenses. by which they can de-annex from South Dakota large cities such as Memphis. Similar Social issues: A number of social- The 92nd South Dakota legislation failed this past session. conservative issues will be prioritized Legislature sits down by Texas leaders, threatening to for business on January 10, 2017. The Liquor and wine sales: A vote to drive wedges between the GOP following are some of the issues vital determine whether or not liquor and majority and the Texas business for small-business survival that NFIB wine sales should be allowed on community. Lt. Governor Dan Patrick is will be monitoring and lobbying on. Sundays is likely to be considered. prioritizing legislation that would block Beer sales on Sundays are currently transgender people from using the Workers’ compensation: Legislators allowed and, as of July 1, 2016, a law bathroom that corresponds with their will likely address the high costs of allowing grocery stores to sell wine gender identity, a fight that has landed workers’ compensation premiums became effective. other states in national headlines in order for South Dakota to remain and angered their business leaders. Broadband expansion: An ongoing competitive with surrounding states. The technology sector and business debate about whether or not community are organizing to fight the municipal broadband providers should Independent business: A primary GOP leadership on issues like this. objective will be to ensure that the be allowed to provide service beyond tax and regulatory environment its service area will likely return. The School choice/school funding: is fair to independent businesses state recently won an appeal that Last summer, the Texas Supreme and contractors struck down the FCC’s decision to Court shocked the public education allow Chattanooga Electric Power establishment and political class when Medicaid expansion: Republican Board to expand its coverage area. it refused to declare the state’s public Governor Dennis Daugaard has school funding system unconstitutional. Texas expressed a willingness to consider Texas has approximately 1,100 school expanding Medicaid. A is the case in Texas meets in biennial districts and a system of “recapture” many other states, much will depend legislative sessions and (aka “Robin Hood”) which reallocates on the landscape at the federal level. writes two-year budgets. in-district tax revenue among districts. The 2017 session begins January 13 and Tennessee In 2015, lawmakers increased public ends June 1. education funding by $1.5 billion, Medicaid expansion: to $41.2 billion. The Texas House Governor Bill Haslam’s alternative Budget: State revenues are tight due to considered, but did not pass, a plan to Medicaid expansion was steep declines in oil prices and oil and proposal that would have added unsuccessful during a 2015 special gas tax revenues since the Legislature another $800 million while removing session. In 2016, Speaker of the adjourned in June 2015. In June 2016, several outdated mechanisms within House Beth Harwell created a Governor Greg Abbott, Lieutenant the finance formulas.

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Tax relief: Lt. Governor Patrick, the of at-risk kids who have not had a measures. Dark money prohibitions presiding officer of the Texas Senate, face-to-face interaction with CPS. were pressed by members of the created a Select Committee on DFPS has since publicly released Texas House and opposed by leading Property Tax Reform & Relief, which numbers showing nearly a thousand members of the Senate. Ethics spent much of 2016 conducting a at-risk children under CPS care were promises to be a gubernatorial priority series of high profile field hearings. not checked on once over the course again in 2017. The Committee notes that, of six months. “Comptroller’s office data shows Utah that between 2005 and 2015, as a Convention of the states: Governor In November, Utahn’s statewide average, county tax levies Abbott will prioritize efforts to get overwhelmingly supported increased 82 percent and city tax the Legislature to approve an Article GOP Governor Gary Herbert levies increased 71 percent, while V Convention of States aimed at to serve another 4 year term (3rd term). median income increased only 29 reducing the power and authority The Utah legislature will convene the percent.” The Senate could consider of the federal government. Abbott’s 2017 general session on 1/23. The measures including modifying 70-page plan lays out nine specific session is 45 days start to sine die on rollback rates, making it easier to proposed amendments that would: 3/9. Both houses will be led by strong protest property tax assessments, or GOP majorities (Senate: 24 R/5 D House: revenue or spending caps for local • Prohibit Congress from regulating 62 R/13 D0 and returning leaders units of government. Governor Abbott activity that occurs wholly within (Senate President and Speaker of the recently said, “We still want to work one state House). Majority leadership controls on cutting the (business franchise) much of the agenda and timing during • Require Congress to balance margins tax even more. We need to the session. The Governor presents a its budget find ways that we can reduce property budget – as does the joint legislature. The initial budget presented by the taxes, about which we’ve heard plenty • Prohibit administrative agencies Governor is 14. 8 Billion with no new of complaints.” from creating federal law taxes or tax cuts. Hailstorm/tort reform: Texas for • Prohibit administrative agencies Utah is a great shape fiscally and is Lawsuit Reform (TLR) will again from preempting state law push reforms to the state’s hailstorm primed for continued economic growth. insurance laws to prevent plaintiffs’ • Two-thirds majority of the states The state population is also growing at lawyers from gaming the system to override a US Supreme one of the fastest rates in the country by persuading home and business Court decision (much of the growth is from within). owners to sue insurance companies for hail claims, even after those claims • Seven-justice supermajority vote Therefore, the upcoming session will have been settled. The battle will for Supreme Court to invalidate focus on education funding (public/ again pit insurers and the business democratically enacted law higher ed), water issues, land use, air community against wealthy and quality, public safety to continue to influential trial lawyers. • Two-thirds majority of the states to prepare for the growth to come. override a federal law or regulation Child protective services overhaul: Other potential issues include: In the wake of news reports of foster- Ethics: Ethics reform championed by medicinal pot, net metering/solar tax care children sleeping in hotels and Governor Abbott and others died in incentives, infrastructure bonding Child Protective Services (CPS) offices, the waning days of the 2015 legislative needs, Medicaid expansion, health care. Gov. Abbott, Lt. Gov. Patrick and session largely over disagreements on House Speaker Straus directed new the issue of “dark money.” Abbott had Vermont Department of Family and Protective wanted any ethics reform package to A check on Democratic Services (DFPS) Commissioner Hank prohibit legislators and other elected control: In November, Whitman to immediately develop a state officials who practice law from Vermonters voted plan to hire and train more special earning referral fees, as well as other resoundingly for Phil Scott, a investigators to take up the backlog disclosure and conflicts of interest Republican, for governor. As a

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result, for the first time in six years, cuts in higher education and (iii) Commissioner to reverse his decision, Democrats in the State House will assuming additional revenue from seek legislation during the 2017 not have complete control. Although the implementation of a tax amnesty session to prohibit what Tesla is they still control both chambers, the program, among other initiatives. The seeking to do, or both. Governor-elect is expected to be Governor also proposed language to a check on many of the most anti- allow him to expand Medicaid if the Airbnb vs. local governments: business initiatives coming out of Trump administration and Congress In 2016 Airbnb sought legislation the Legislature. leave federal funds for expansion in to avoid a hodge-podge of local place. How the tax-averse House of government regulations, including Budget: State budget challenges, Delegates will handle the Internet zoning that could threaten its business particularly in Medicaid and sales tax proposal remains to be seen. model in some parts of the state. education, will be front and center Both House of Delegates and Senate Airbnb also did not want to deal with during the upcoming session. The majority leadership have signaled the multitude of local tax collectors. Governor has promised to push hard that the Medicaid expansion authority Favorable legislation was derailed at on economic development issues, language is dead on arrival. the last minute by the clever action such as permit reform; expanded of a powerful Senate ally of hotel and programs to address the opiate crisis Tackling complex issues during a motel owners. The issue is expected in Vermont; and increased efficiency short session in Virginia is always a to rear its head again in 2017. in state government agencies. In significant challenge for advocates of addition, expect advocates to push change in the absence of significant Medicaid expansion: For three years, for paid family leave, marijuana work among stakeholders in the Governor McAuliffe has tried to legalization, a sugar-sweetened interim. Some of the issues expected expand Medicaid within the context of beverage tax and cuts in executive to be debated in January and the Affordable Care Act. Both the branch compensation, among February include: House of Delegates and Senate, other issues. controlled by conservative Republican Certificate of public need reform: majorities, have steadfastly refuse to Virginia The House of Delegates promotes full expand Medicaid, citing distrust of Issues addressed repeal of Virginia’s certificate of public federal government funding in the out by the 2017 regular need regime supported by the for- years. Agreement between the session of the Virginia General profit hospitals, health insurance plans Administration and the Legislature is Assembly will be informed by three and some physician groups. It has again unlikely. relevant factors: (i) the coming session been met with strong opposition from is a “short session” of 45 calendar the not-for-profit hospitals. The Senate West Virginia days; (ii) all 100 House of Delegates has not yet bought into the repeal and Energy (coal and natural members and all three statewide will likely prolong the debate into the gas): Considering the offices are up for election in the fall; 2018 session. immense importance of and (iii) the Commonwealth faces a the energy sector to West Virginia’s $1.2 billion budget deficit. In short, Tesla vs. Virginia Automobile economy, issues that relate to there is not a lot of revenue to spread Dealers Association: Tesla requested regulation, employment and taxation around and not a lot of time to sit in a second dealer showroom from of the sector will be paramount in the Richmond arguing about issues. the Virginia Department of Motor upcoming legislative session. There Vehicles Commissioner who granted are slight indications that, with prices Governor Terry McAuliffe, who that request in December 2016. of metallurgical coal increasing, a is ineligible to run for reelection, The Virginia Automobile Dealers small comeback in the coal market has proposed to close the state’s Association considers Tesla’s for the met-coal sector could be budget gap in part by (i) making direct-to-consumer sales model on the horizon. West Virginia’s coal Amazon and other out-of-state a transcendental threat to the severance tax is the highest in the Internet commerce retailers collect traditional motor vehicle franchise region and portions of the coal sector state sales tax on items shipped to model. Accordingly, the Association having been pushing for it to be its residents, (ii) making significant will pursue litigation against the lowered. But with the state’s budget

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crisis, that has yet to materialize. The Budget crisis: Largely due to a major cycle is nearly $700 million short coal industry will continue to look downturn in the coal industry, West of agency requests leading up to for help from lawmakers in West Virginia is currently facing a budget the Governor’s budget proposal in Virginia, to the extent that assistance crisis like none other in its history. The January 2017. The projected shortfall can be provided at the state level. budget crisis itself has led to a variety based on agency requests largely For natural gas, we continue to of potential new taxes, from excise stems from a $500 million increase anticipate battles regarding the rights taxes on specific goods and services requested by the Department of of land/royalty owners versus those to general sales taxes. Regardless of Public Instruction and a $450 million of the gas companies themselves. efforts to increase revenue for the increase for Medicaid spending Recent battles have included “forced state, major cuts to government requested by the Department of pooling” legislation. spending will also be on the table. Health Services. Legislative leaders While there are indications that the have echoed the Governor’s support Substance abuse: West Virginia coal industry may see a slight increase for increased education funding in the has the highest opiod overdose rate in production over the coming year, upcoming budget. in the nation and lawmakers are the industry is currently still too continually looking for ways to combat unstable to determine accurate Transportation funding: The the situation. Recent legislation has severance tax revenues. transportation funding debate included regulation of substance was a focal point leading up to the abuse treatment centers, medication Wisconsin November elections and expectations assisted treatment and various Wisconsin begins its two- are that it will be the key budget additional criminal penalties, and, year legislative session issue for GOP leaders. A contingent two weeks after the gubernatorial on January 3, 2017, of legislative leaders has actively election in November, Governor Terry and will immediately begin the engaged in support of a long-term McAuliffe announced that State Health budget process with the release of transportation funding solution to Commissioner Marissa J. Levine has Governor Scott Walker’s biennial meet economic needs in the state. declared the Virginia opioid addiction budget proposal, which is due out Legislative reports have stated the crisis a public health emergency. by January 31. Wisconsin begins its state is nearly a billion dollars short on fourth consecutive legislative session transportation revenue over the next Broadband expansion: West under full GOP control. Along with biennium. Governor Walker has firmly Virginia has the lowest percentage a Republican Governor, both the stated his position that he will veto any of citizens with access to broadband Assembly and Senate increased their increase in the gas tax or registration in the nation. Over the last year the GOP majorities in the November fee without a corresponding cut Legislature has commissioned a study elections. Governor Walker is in taxes. As legislators target on the impact of building the “middle touting additional funding for public transportation efficiencies, full mile” infrastructure necessary to schools and technical colleges, and prevailing wage repeal has become a provide access across the state. There performance-based funding for the likely early session effort. are competing interests between public university system. Additional those interested in building the initiatives include rural broadband Tax efforts: Efforts to improve “middle mile” and those interested expansion, fighting the opioid Wisconsin’s business climate, which in only building the “last mile” of epidemic, workforce development and shot up to 11th best in 2016 from 41st networking infrastructure. While the government accountability measures. in 2010 (according to Chief Executive citizenry overwhelmingly supports In the last six years, the Governor magazine), will continue. To further increased broadband access, the has led tax relief efforts totaling the goal, legislative leaders have state’s budget crises, coupled with $4.7 billion. made “fairer, flatter, lower taxes” a key the debate over government’s role initiative in the upcoming session. in providing such infrastructure, has Budget: While Wisconsin approaches A planned Speaker’s Task Force on hampered expansion. its 2017-19 budget cycle after ending Tax Reform will team legislators and 2015-16 with a positive general fund industry leaders to examine simplifying balance of $331 million, the expected the state tax code for Wisconsin revenue projection over the upcoming families and businesses.

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Continued fight against opioid demand for skilled labor in the state, Wyoming abuse: Previous bipartisan legislative legislators look at ways to prepare Balanced budget initiatives to advance the state’s Heroin students for career readiness. amendment: There will and Opiate Prevention and Education Occupational license reform has also be a third attempt at (HOPE) agenda have created a been proposed both by the Governor passing a resolution demanding that strong foundation for continued and Assembly leaders for the the US Congress call a convention efforts, prompting Governor upcoming session. One proposal may of the states under Article V of Walker to create a Governor’s Task include a significant decrease in the Constitution for the purpose Force on Opioid Abuse to further requirements for many licenses and of proposing a balanced budget awareness and action. possibly licensure elimination in some amendment to the Constitution. areas. Other proposals include an Workforce development: The expansion of programming for low State revenues: Wyoming continues state reached an all-time high in income adults to gain work to struggle with a downturn in revenue employment participation in 2016 experience, employment certification from the state’s mineral resources, andunemployment claims are at or for prospective employees with necessitating either additional cuts to near historic lows. With a high criminal histories, and creating spending on programs and services or business startup incentives. increasing state revenue.

107 dentons.com 107 Freshman Members of the 115th Congress

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Senate

California Illinois Kamala Harris (D) Tammy Duckworth (D) Incoming class seniority: Open seat - Incoming class seniority: Defeated Mark Kirk Replaced Barbara Boxer (D) - 98th overall (R) - 96th overall Born: 1964 Born: 1964 Party change: No Party change: Yes Prior political experience: Attorney General of Prior political experience: Member of the U.S. California, San Francisco District Attorney House, Assistant Secretary of Veterans’ Affairs, Lieutenant Colonel, U.S. Army

Indiana Louisiana

Todd Young (R) John Neely Kennedy (R) Incoming class seniority: Open seat - Incoming class seniority: Open seat - Replaced Dan Coats (R) - 95th overall Replacing David Vitter (R) - 99th overall Born: 1972 Born: 1951 Party change: No Party change: No Prior political experience: Member of the U.S. Prior political experience: Louisiana State House, Captain, U.S. Marine Corps Treasurer, Attorney

Maryland New Hampshire Chris Van Hollen (D) Maggie Hassan (D) Incoming class seniority: Open seat - Incoming class seniority: Defeated Kelly Replaced Barbara Mikulski (D) - 94th overall Ayotte (R) - 97th overall Born: 1959 Born: 1958 Party change: No Party change: Yes Prior political experience: Member of the U.S. Prior political experience: Governor of New House, State Senator, State Delegate Hampshire, State Senate Majority Leader

Nevada Catherine Cortez Masto (D) Incoming class seniority: Open seat - Replaced Harry Reid (D) - 100th overall Born: 1964 Party change: No Prior political experience: Nevada Attorney General, Attorney

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House

Arizona (1) Arizona (5) Tom O’Halleran (D) Andy Biggs (R) Born: 1964 Born: 1958 Party change: No Party change: No Prior political experience: State Senator Prior political experience: President of the State Senate

California (17) California (20) Ro Khanna (D) Jimmy Panetta (D) Born: 1976 Born: 1969 Party change: No Party change: No Prior political experience: Deputy Assistant Prior political experience: Deputy District Secretary of Commerce Attorney, Monterey County; Lieutenant, U.S. Navy

California (24) California (44) Salud Carbajal (D) Nanette Barragán (D) Born: 1964 Born: 1976 Party change: No Party change: No Prior political experience: Santa Barbara Prior political experience: Hermosa Beach County Supervisor City Councilwoman

California (46) Delaware (at-large) Lou Correa (D) Lisa Blunt Rochester (D) Born: 1958 Born: 1961/62 Party change: No Party change: No Prior political experience: State Senator; Prior political experience: State Labor Orange County Supervisor; State Assemblyman Secretary; CEO Metropolitan Wilmington Urban League

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Florida (1) Florida (2)

Matt Gaetz (R) Neal Dunn (R) Born: 1982 Born: 1953 Party change: No Party change: Yes Prior political experience: State Prior political experience: Surgeon; Major, U.S. Representative Army

Florida (4) Florida (5) John Rutherford (R) Al Lawson (D) Born: 1952 Born: 1948 Party change: No Party change: No Prior political experience: Sheriff of Duval Prior political experience: State Senator; State County Representative

Florida (7) Florida (9) Stephanie Murphy (D) Darren Soto (D) Born: 1978 Born: 1978 Party change: Yes Party change: No Prior political experience: Professor, Rollins Prior political experience: State Senator; State College; National Security Specialist Representative

Florida (10) Florida (13) Val Demings (D) Charlie Crist (D) Born: 1957 Born: 1956 Party change: Yes Party change: Yes Prior political experience: Chief of Orlando Prior political experience: Governor; Attorney Police Department General; Commissioner of Education; State Senator

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Florida (18) Florida (19)

Brian Mast (R) Francis Rooney (R) Born: 1980 Born: 1953 Party change: Yes Party change: No Prior political experience: Staff Sergeant, Prior political experience: Businessman; U.S. Army United States Ambassador to the Holy See

Georgia (3) Illinois (8)

Drew Ferguson (R) Raja Krishnamoorthi (D) Born: 1966/67 Born: 1973 Party change: No Party change: No Prior political experience: Mayor of West Prior political experience: Businessman; Point; Dentist Deputy State Treasurer

Illinois (10) Indiana (3) Brad Schneider (D) Jim Banks (R) Born: 1961 Born: 1979 Party change: Yes Party change: No Prior political experience: U.S. Representative Prior political experience: State Senator; for IL-10 (2013-2015) Lieutenant, U.S. Navy

Indiana (9) Kansas (1) Trey Hollingsworth (R) Roger Marshall (R) Born: 1983 Born: 1960 Party change: No Party change: No Prior political experience: Businessman Prior political experience: Obstetrician; Captain, U.S. Army

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Louisiana (3) Louisiana (4) Clay Higgins (R) Mike Johnson (R) Born: 1961/62 Born: 1972 Party change: No Party change: No Prior political experience: Reserve Deputy Prior political experience: State Marshal of Lafayette; St. Landry Parish Representative Sheriff’s Deputy

Maryland (4) Maryland (8)

Anthony Brown (D) Jamie Raskin (D) Born: 1961 Born: 1962 Party change: No Party change: No Prior political experience: Lieutenant Prior political experience: State Senator Governor; State Delegate; Colonel, U.S. Army

Michigan (1) Michigan (10) Jack Bergman (R) Paul Mitchell (R) Born: 1946/47 Born: 1956/57 Party change: No Party change: No Prior political experience: Lieutenant General, Prior political experience: Businessman U.S. Marine Corps

Minnesota (2) Nebraska (2) Jason Lewis (R) Don Bacon (R) Born: 1955 Born: 1963 Party change: No Party change: Yes Prior political experience: Radio talk Prior political experience: Brigadier General, show host U.S. Air Force

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Nevada (3) Nevada (4) Jacky Rosen (D) Ruben Kihuen (D) Born: 1957 Born: 1980 Party change: Yes Party change: Yes Prior political experience: Computer Prior political experience: State Senator; Programmer; President, Congregation State Assemblyman Ner Tamid

New Hampshire (1) New Jersey (5)

Carol Shea-Porter (D) Josh Gottheimer (D) Born: 1952 Born: 1975 Party change: Yes Party change: Yes Prior political experience: U.S. Representative Prior political experience: Government staffer for NH-1 (2007-2011; 2013-2015) and speechwriter

New York (3) New York (13) Thomas Suozzi (D) Adriano Espaillat (D) Born: 1962 Born: 1954 Party change: No Party change: No Prior political experience: Nassau County Prior political experience: State Senator; Executive; Mayor of Glen Cove State Assemblyman

New York (19) New York (22)

John Faso (R) Claudia Tenney (R) Born: 1952 Born: 1961 Party change: No Party change: No Prior political experience: State Prior political experience: State Assemblyman Assemblywoman

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North Carolina (13) Pennsylvania (8) Ted Budd (R) Brian Fitzpatrick (R) Born: 1971/72 Born: 1973 Party change: No Party change: No Prior political experience: Businessman Prior political experience: Special Agent, FBI

Pennsylvania (16) Tennessee (8) Lloyd Smucker (R) David Kustoff (R) Born: 1961 Born: 1966 Party change: No Party change: No Prior political experience: State Senator, West Prior political experience: U.S. Attorney, Lampeter Township Supervisor W.D. Tenn.

Texas (15) Texas (19) Vincente González (D) Jodey Arrington (R) Born: 1967/68 Born: 1972 Party change: No Party change: No Prior political experience: Attorney Prior political experience: Businessman; Texas Tech Vice Chancellor; Government staffer

Virginia (2) Virginia (4) Scott Taylor (R) Donald McEachin (D) Born: 1979 Born: 1961 Party change: No Party change: Yes Prior political experience: State Prior political experience: State Senator, Delegate, Captain, Navy SEAL State Delegate

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Virginia (5) Washington (7) Tom Garrett (R) Pramila Jayapal (D) Born: 1972 Born: 1965 Party change: No Party change: No Prior political experience: State Senator; Prior political experience: State Senator Commonwealth’s Attorney of Louisa County; Captain, U.S. Army

Wisconsin (8) Wyoming (at-large)

Mike Gallagher (R) Liz Cheney (R) Born: 1984 Born: 1966 Party change: No Party change: No Prior political experience: Captain, U.S. Prior political experience: Deputy Assistant Marine Corps, Former staff on Senate Secretary of State for Near Eastern Affairs Foreign Relations Commitee

Non-voting members Puerto Rico (at-large)

Jenniffer González (PNP/R) Born: 1976 Party change: Yes/No Prior political experience: Speaker of the House of Representatives

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Dentons’ Public Policy and Regulation Practice

Eric Tanenblatt Michael Zolandz Hon. Gordon Giffin Hon. Newt Gingrich Hon. Ron Kaufman Chair, Public Policy Practice Chair, Federal Regulatory and Global Public Policy Leader Washington, DC Washington, DC Compliance Practice

Hon. Howard Dean Sander Lurie Scotty (Maryscott) Greenwood Hon. Bill McCollum John Russell IV Washington, DC Washington, DC Washington, DC Washington, DC Washington, DC

Robin Adams Nicholas Allard Joseph (Joe) Andrew Timothy Ashby Yohai Baisburd Washington, DC Washington, DC Global Chairman London Washington, DC

Hon. Thurbert Baker Dan Baskerville Virginia Beckett Jeremy Berry Todd Bertoson Atlanta, Washington, DC Atlanta Washington, DC Atlanta Washington, DC

Randy Bregman John Bezdek Vedia Biton Eidelman Hon. Jeff Bleich Rodney Boyd Washington, DC Washington, DC Tysons Corner Oakland St. Louis

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George Broder Marc Burgat Hon. Mark Burkhalter Kate Casas Giovanna Cinelli San Francisco Sacramento Atlanta St. Louis Tysons

Victor Cruz Hon. George (Buddy) Darden Todd Daubert Samuel Daughety Megan Delany New York Atlanta Washington, DC Washington, DC Washington, DC

John Duffy Fred DuVal Hon. Rodney Ellis Randy Evans Alan Fedman Washington, DC Phoenix Houston Atlanta, Washington, DC Washington, DC

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Gary Goldberg Brian Grace Gen. Timothy Haake Jeff Hamling Seth Harris Washington, DC St. Louis Washington, DC Atlanta, Washington, DC Washington, DC

Paul Hatch Jenifer Healy Hon. William Hilleary Thomas Howell Juan Carlos Iturregui Washington, DC Washington, DC Washington, DC Washington, DC Washington, DC

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Anthony Jannotta Hon. Craig Johnson Mark Johnson Zachary Jones Benjamin Keane Washington, DC New York New York Washington, DC Washington, DC

Benjamin Kern Mike Klein Jeff Krilla Steven Labovitz Stanley Landfair Washington, DC New York Washington, DC Atlanta San Francisco/Sacramento

Gary LaPaille Dennis Lee Hon. Edward Lindsey, Jr. Kelly Lugar Mark Lunn Washington, DC Washington, DC Atlanta Washington, DC Washington, DC

Joseph Mantilla Keith Mason Frederick McClure Alex McGee Mike McNamara Washington, DC Atlanta Washington, DC Washington, DC US CEO

Hon. Jeff Modisett Valerie Nelson C. Randall Nuckolls Kenneth Nunnenkamp Gilberto Ocañas Los Angeles Washington, DC Washington, DC Tysons Corner Washington, DC

Thomas Ochs Kathleen O’Connor Robert Odawi Porter Amy Odom Javier Ortiz New York New York Washington, DC Atlanta Washington, DC

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Hon. Willam Owens Stefan Passantino Rose Petoskey Josh Pitre Margeaux Plaisted Washington, DC Washington, DC, Atlanta Washington, DC Washington, DC Washington, DC

Tim Plunkett William Plunkett, Jr. David Pollak Elliott Portnoy James Richardson New York New York New York Global CEO Atlanta

Kevin Riggs Colin Robertson Andrew Shaw Suzanne (Susi) Schaeffer V. Heather Sibbison St. Louis Washington, DC Washington, DC Washington, DC Washington, DC

Kelvin Simmons Hon. David Skaggs George Skibine Christopher (Kit) Smith Mary Smyth Kansas City Denver Washington, DC Washington, DC Washington, DC

Jon Sohn Amy Solomon Darry Sragow Richard Stanton Hon. Amy Stephens Washington, DC Albany Los Angeles Washington, DC Denver

David Tafuri Benjamin Vinson Malcolm Weems Mark Weller Jim Williams Washington, DC Atlanta Chicago Washington, DC Tysons Corner

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Hon. Alan Wolff Jasmine Zaki Washington, DC Washington, DC

122 dentons.com dentons.com 123 About Dentons

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CSPolicy Scan US 2017-v19 — 02/01/2017