Senate Republicans Release Better Care Reconciliation Act of 2017

On Thursday, June 22, Senate Republicans released the text of their health reform discussion draft.  A PDF of the text can be accessed here.

We found the following documents and articles to be particularly useful:

  • The Congressional Research Service Section-by-Section Summary of the Better Care Reconciliation Act of 2017 (link)
  • The Washington Post’s Kim Soffen and Darla Cameron explain the Senate draft (link)
  • The Atlantic’s Vann R. Newkirk II discusses the Medicaid policy changes (link)

Senate Continues Work on Iran and Russia Sanctions

Senate Legislative Activity

The Senate will convene on Monday, June 12 at 4:00 pm.  Following any Leader remarks, the Senate will be in a period of morning business until 5:00 pm.

At 5:00 pm, the Senate will proceed to Executive Session to consider the nomination of Kenneth P. Rapuano, of Virginia, to be Assistant Secretary of Defense. There will be up to 30 minutes for debate prior to a roll call vote on confirmation of the nomination. Following disposition of the nomination, the Senate will resume consideration of the motion to proceed to S.722, Iran Sanctions, with all post-cloture time considered expired.

There will be at least one roll call vote at 5:30 pm with the potential of a second.

House Legislative Activity

On Monday, the House will meet at 12:00 p.m. for morning hour and 2:00 pm for legislative business. Votes will be postponed until 6:30 pm.

The following legislation will be considered under suspense on of the rules:

  1. H.R. 338 – To promote a 21st century energy and manufacturing workforce (Sponsored by Rep. Bobby Rush / Energy and Commerce Committee)
  2. H.R. 446 – To extend the deadline for commencement of construction of a hydroelectric project (Sponsored by Rep. Morgan Griffith / Energy and Commerce Committee)
  3. H.R. 447 – To extend the deadline for commencement of construction of a hydroelectric project (Sponsored by Rep. Morgan Griffith / Energy and Commerce Committee)
  4. H.R. 627 – Streamlining Energy Efficiency for Schools Act of 2017 (Sponsored by Rep. Matt Cartwright / Energy and Commerce Committee)
  5. H.R. 951 – To extend the deadline for commencement of construction of a hydroelectric project (Sponsored by Rep. Virginia Foxx / Energy and Commerce Committee)
  6. H.R. 1109 – To amend section 203 of the Federal Power Act (Sponsored by Rep. Tim Walberg / Energy and Commerce Committee)
  7. H.R. 2122 – To extend the deadline for commencement of construction of a hydroelectric project involving Jennings Randolph Dam (Sponsored by Rep. David McKinley / Energy and Commerce Committee)
  8. H.R. 2274 – HYPE Act (Sponsored by Rep. Scott Peters / Energy and Commerce Committee)
  9. H.R. 2292 – To extend a project of the Federal Energy Regulatory Commission involving the Cannonsville Dam (Sponsored by Rep. John Faso / Energy and Commerce Committee)
  10. H.R. 2457 – J. Bennett Johnston Waterway Hydropower Extension Act of 2017 (Sponsored by Rep. Mike Johnson / Energy and Commerce Committee)

On Tuesday, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business.

H.R. 2581 – Verify First Act (Subject to a Rule) (Sponsored by Rep. Lou Barletta / Ways and Means Committee)

H.R. 1094– Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 (Subject to a Rule) (Sponsored by Sen. Marco Rubio / Veterans Affairs Committee)

On Wednesday, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business.

H.R. 2372 – VETERAN Act (Subject to a Rule) (Sponsored by Rep. Sam Johnson / Ways and Means Committee)

On Thursday, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business.

H.R. 1215 – Protecting Access to Care Act of 2017, Rules Committee Print (Subject to a Rule) (Sponsored by Rep. Steve King / Judiciary Committee)

On Friday, the House will meet at 9:00 am for legislative business. Last votes expected no later than 3:00 pm.

H.R. 2579 – Broader Options for Americans Act (Subject to a Rule) (Sponsored by Rep. Pat Tiberi / Ways and Means Committee)

Sources:  www.democrats.senate.govhttp://www.majorityleader.gov/

State Attorneys General June 12 Update

Squire Patton Boggs’ State Attorneys General Practice Group is comprised of lawyers who have served at senior levels in state AG offices around the country and whose practices focus, to one degree or another, on representing clients before these increasingly assertive and powerful, yet often overlooked, government agencies, as explained in detail here.

In these updates, we will call attention to the most noteworthy state AG news or developments emerging in the previous week.

Advocacy

Massachusetts AG Maura Healey and 32 State AGs have joined together to oppose President Trump’s proposal to eliminate federal funding for the Legal Services Corporation (LSC). The coalition of AGs drafted a letter to Congress extolling the role of LSC in “help[ing] residents nationwide receive justice.”

Virginia AG Mark Herring and a coalition of 20 other AGs in a joint letter are urging House leadership to reject “anti-consumer legislation that would roll back many of the critical protections adopted in the wake of the financial crises that harmed so many hard-working Americans.” Their principal objective is defunding the Consumer Financial Protection Bureau (CFPB).

Regulatory

Texas AG Ken Paxton and 16 fellow AGs are calling for regulatory reform to protect citizens and businesses from what they see as federal government overreach. In a letter, the AGs encouraged the president to push Congress to limit the enforcement authority of federal agencies.

House Agriculture Committee Hearing to Focus on Watershed Programs

Legislative Activity

House Agriculture Committee Hearing to Focus on Watershed Programs

On Wednesday, the House Agriculture Committee’s Subcommittee on Conservation and Forestry is scheduled to hold a hearing focused on small watershed infrastructure, specifically the Watershed Rehabilitation Program and the Watershed and Flood Prevention Operations (WFPO) Program. Both programs are administered by the United States Department of Agriculture’s Natural Resources Conservation Service, which partners with local watershed sponsors to fund projects relating to soil conservation; flood prevention, such as dam rehabilitation; water conservation, usage, and disposal; and surveys.

Rep. Frank Lucas (R-OK), Chairman of the Subcommittee, has a longstanding interest in watershed infrastructure, particularly in the rehabilitation of aging small upstream flood control measures. Rep. Lucas was the sponsor of the Small Watershed Rehabilitation Amendments of 2000, which included language to create the Watershed Rehabilitation Program. The Grain Standards and Warehouse Improvement Act of 2000 ultimately included Rep. Lucas’ legislative language to create the Watershed Rehabilitation Program, which was most recently amended by the 2014 Farm Bill.

The WFPO Program, often referred to as the PL-566 Small Watershed Program or simply PL-566, is a permanently authorized program with roots back to the Flood Control Act of 1944 and the Watershed Protection and Flood Prevention Act of 1954. The WFPO Program relies on annual discretionary funds and is facing significant backlog, as it has not received appropriations since Fiscal Year 2010. However, last month, President Trump signed the Fiscal Year 2017 omnibus appropriations legislation into law, which included $150 million for the WFPO Program.

Rep. Lucas is expected to highlight the importance of the programs and their role in not only protecting life and property, but also in preventing disaster expenses and creating jobs, especially for rural America. This week’s hearing will also allow the committee to consider the future of existing programs and to deliberate the effects of the six-year funding gap for the WFPO Program.

Markups on Appropriations Bills Begin in the House this Week with FY2018 MilCon-VA Bill; House Republican Members Push for an Omnibus Before August Recess

Legislative Activity

Markups on Appropriations Bills Begin in the House this Week with FY2018 MilCon-VA Bill; House Republican Members Push for an Omnibus Before August Recess

Appropriations subcommittees in the House will commence FY 2018 spending bill markups this week, with the Military Construction and Veterans Affairs (MilCon-VA) subcommittee markup scheduled for this evening. Still lacking a comprehensive FY 2018 budget resolution, the committee is reportedly planning to release the top-line discretionary spending level (302A) later this month.

The Republican Study Committee joined Rep. Tom Graves (R-GA), who chairs the House Appropriations Subcommittee on Financial Services and General Government, in supporting his strategy to move directly to a 12-bill omnibus, with the intent to send it to the Senate prior to the August recess. While proponents of the plan recognize the challenge in achieving this goal, given the House is only in session six weeks before the August recess, they feel it will provide leverage as they eventually work through an FY 2018 compromise with the Senate.

This Week’s Hearings:

House Appropriations Committee

  • On Monday, June 12, the House Appropriations Subcommittee on Financial Services and General Government has scheduled a Department of Treasury budget hearing. The witness will be:
    • The Honorable Steven Mnuchin, Secretary, Department of the Treasury
  • On Monday, June 12, the House Appropriations Subcommittee on Military Construction, Veterans Affairs and Related Agencies has scheduled a markup for the FY 2018 Military Construction and Veterans Affairs Appropriations Bill. The witnesses will be announced.
  • On Tuesday, June 13, the House Appropriations Subcommittee on Homeland Security has scheduled a hearing titled “Immigration and Customs Enforcement &Customs and Border Protection FY18 Budget Request.” The witnesses will be:
    • Thomas D. Homan, Acting Director, Immigration and Customs Enforcement
    • John P. Wagner, Deputy Executive Assistant Commissioner, Customs and Border Protection
    • Carla L. Provost, Acting Chief, United States Border Patrol
  • On Tuesday, June 13, the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies has scheduled a Department of Justice budget hearing. The witness will be:
    •  The Honorable Jefferson Sessions, Attorney General
  • On Wednesday, June 14, the House Appropriations Subcommittee on State, Foreign Operations, and Related Programs has scheduled a hearing titled “Department of the Treasury – International Programs Budget Hearing.” The witness will be:
    • The Honorable Steven Mnuchin, Secretary, Department of the Treasury
  • On Wednesday, June 14, the House Appropriations Subcommittee on State, Foreign Operations, and Related Programs has scheduled a Department of State budget hearing. The witness will be:
    • The Honorable Rex Tillerson, Secretary, Department of State
  • On Thursday, June 15, the House Appropriations Subcommittee on Defense has scheduled a Department of Defense budget hearing. The witnesses will be:
    • The Honorable James N. Mattis, Secretary, Department of Defense
    • General Joseph Dunford, USMC, Chairman, Joint Chiefs of Staff
  • On Thursday, June 15, the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has scheduled a Department of Transportation budget hearing. The witness will be:
    • The Honorable Elaine Chao, Secretary, Department of Transportation
  • On Thursday, June 15, the House Appropriations Subcommittee on Interior, Environment, and Related Agencies has scheduled an Environmental Protection Agency budget hearing. The witnesses will be:
    • The Honorable Scott Pruitt, Administrator, Environmental Protection Agency
    • Ms. Holly Greaves, Senior Advisor to the Administrator, Environmental Protection Agency
  • On Friday, June 16, the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies has scheduled a Federal Bureau of Investigation budget hearing. The witnesses will be:
    • The Honorable Andrew G. McCabe, Acting Director, Federal Bureau of Investigation

Senate Appropriations Committee

  • On Tuesday, June 13, the Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies has scheduled a hearing titled “Review of the FY 2018 Budget Request for the U.S. Department of Justice.” The witness will be:
    • The Honorable Jeff Sessions, Attorney General, U.S. Department of Justice
  • On Tuesday, June 13, the Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies has scheduled a hearing titled “Hearing to Review the FY 2018 USDA Budget Request.” The witnesses will be:
    • The Honorable Sonny Perdue, Secretary, U.S. Department of Agriculture
    • Dr. Robert Johansson, Chief Economist, U.S. Department of Agriculture
    • Mr. Michael Young, Budget Officer, U.S. Department of Agriculture
  • On Tuesday, June 13, the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has scheduled a hearing titled “Review of the FY2018 Budget Request for the U.S. Dept. of Transportation.” The witness will be:
    • The Honorable Elaine Chao, Secretary, U.S. Department of Transportation
  • On Tuesday, June 13, the Senate Appropriations Subcommittee on State, Foreign Operations, and Related Programs has scheduled a hearing titled “Review of the FY 2018 Budget for the U.S. Department of State.” The witness will be:
    • The Honorable Rex Tillerson, Secretary, U.S. Department of State
  • On Wednesday, June 14, the Senate Appropriations Subcommittee on Defense has scheduled a hearing titled “Review of the FY 2018 Budget Request for the U.S. Dept. of Defense.” The witnesses will be:
    • The Honorable James N. Mattis, Secretary, U.S. Department of Defense
    • General Joseph F. Dunford, Jr., USMC, Chairman, Joint Chiefs of Staff
  • On Wednesday, June 14, the Senate Appropriations Subcommittee on the Legislative Branch has scheduled a hearing titled “Review of the FY 2018 Budget Requests for the Senate Sergeant at Arms, U.S. Capitol Police.” The witnesses will be:
    • The Honorable Frank R. Larkin, Sergeant At Arms, United States Senate
    • Matthew Verderosa, Chief of Police, United States Capitol Police
  • On Wednesday, June 14, the Senate Appropriations Subcommittee on Energy and Water Development has scheduled a hearing titled “Review of the FY2018 Budget Request for the National Nuclear Security Administration.” The witnesses will be:
    • Lieutenant General Frank G. Klotz, USAF (Ret.), Under Secretary For Nuclear Security Administrator, National Nuclear Security Administration
    • Mr. Philip T. Calbos, Acting Deputy Administrator For Defense Programs, National Nuclear Security Administration, U.S. Department of Energy
    • Mr. David G. Huizenga, Acting Deputy Administrator For Defense Nuclear Nonproliferation, National Nuclear Security Administration, U.S. Department of Energy
    • Admiral James F. (Frank) Caldwell Jr., USN, Deputy Administrator For Naval Reactors, National Nuclear Security Administration, U.S. Department of Energy
  • On Thursday, June 15, the Senate Appropriations Subcommittee on Departments of Labor, Health and Human Services, Education, and Related Agencies has scheduled a hearing titled “Review of the FY2018 Department of Health & Human Services Budget Request.” The witness will be:
    • The Honorable Thomas Price, Secretary, U.S. Department of Health and Human Services

Senate Budget Committee

  • On Tuesday, June 13, the Senate Budget Committee has scheduled a hearing titled “President’s FY 2018 Budget and Revenue Proposals.” The witness will be:
    • The Honorable Steven T. Mnuchin, Secretary, U.S. Department of the Treasury

Secretary DeVos Testifies on Education Budget; Department of Education Must Make Decisions on Higher Ed Regulations

Legislative Activity

Effective Apprenticeships Rebuild National Skills (EARNS) Act

Members of the House Committee on Education and the Workforce introduced two bills that seek to promote fair union elections and restore important protections for workers and employers. The first is the Workforce Democracy and Fairness Act (H.R. 2776), introduced by Rep. Tim Walberg (R-MI), chairman of the Subcommittee on Health, Employment, Labor, and Pensions. The bill seeks to protect worker freedom by addressing the National Labor Relations Board’s (NLRB) ambush election rule and micro-union scheme. The second, introduced by Rep. Joe Wilson (R-SC), is the Employee Privacy Protection Act (H.R. 2775), which will roll back NLRB policies that may jeopardize the privacy of workers and their families.

House Expresses Concern on Job Corps

Last week, House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) and Subcommittee on Higher Education and Workforce Development Chairman Brett Guthrie (R-KY) sent a letter to the Department of Labor (DOL) to express concerns over challenges facing the federal Job Corps program, as well as to request detailed information on steps the Department is taking to improve the health and safety of those who participate in the program. In 2014, the Workforce Innovation and Opportunity Act was signed into law to modernize our nation’s workforce development system. The legislation enacted several reforms to help put more Americans back to work, including provisions to improve Job Corps. However, the Committee is concerned about multiple reports, including from DOL’s Inspector General, which they say have revealed mismanagement of the program.

This Week’s Hearings:

  • On Wednesday, June 14, the House Education and the Workforce Subcommittee on Health, Employment, Labor, and Pensions has scheduled a hearing to consider the following legislative reforms to the National Labor Relations Act: H.R. 2776, Workforce Democracy and Fairness Act; H.R. 2775, Employee Privacy Protection Act; and, H.R. 2723, Employee Rights Act. The witnesses will be announced.
  • On Thursday, June 15, the House Education and the Workforce Subcommittee on Higher Education and Workforce Development has scheduled a hearing titled “Helping Americans Get Back to Work: Implementation of the Workforce Innovation and Opportunity Act.” The witnesses will be announced.

 

Regulatory Activity

Secretary DeVos Testifies on Department of Education Budget

Last Tuesday, June 6, Secretary of Education Betsy DeVos testified before the Senate Appropriations Committee, Subcommittee on Labor, Health and Human Services, Education and Related Agencies (LHHS), about President Donald Trump’s budget request, which proposes cuts of more than 13 percent to the Department of Education. Sen. Roy Blunt (R-MO), Chairman of the Subcommittee, told Secretary DeVos that the President’s proposed cuts are not likely to occur. Sen. Shelley Moore Capito (R-WV) expressed her frustration with the Department’s rejection of Upward Bound applications over formatting errors, and Sen. Jerry Moran (R-KS) showed concerns over cuts to Impact Aid, which provides funds to school districts on nontaxable federal lands.

Democrats on the Committee, including Sens. Patrick Leahy (D-VT), Chris Murphy (D-CT), and Joe Manchin (D-WV) explained the ways their respective states will be harmed by the proposed budget cuts. Additionally, Sen. Patty Murray (D-WA), Ranking Member of the LHHS Subcommittee, pressed Secretary DeVos on her plans to thoroughly respond to letters requesting information. Secretary DeVos replied that the Department had sent responses to over half of the letters already, and that they would continue to respond to requests for information.

The LHHS Subcommittees in the House and Senate will markup their bills in the coming weeks, with hopes to get them done before the August recess.

Higher Ed Regulations

The Department of Education must take action before a July 1 deadline on two major Obama-era rules that affect colleges and universities, particularly for-profit schools. The first, the borrower defense to repayment package of regulations, includes new standards for debt relief for defrauded student loan borrowers, expanded powers for Department regulators, and a ban on mandatory arbitration agreements at colleges. The second, the gainful employment rule, cuts off federal funding to career colleges, mostly for-profit schools, where students end up with high student debt relative to their earnings. The administration may further delay both rules until they make a decision on whether to try rewriting them.

The California Association of Private Postsecondary Schools, a trade association for California for-profit colleges, has sued to block the entire package of borrower defense to repayment regulations. Meanwhile, a report published by the Center for American Progress and written by a former Obama administration official who helped create the rule, says the typical graduate of programs would benefit greatly from the federal government’s income-driven repayment plan, which lets students pay a percentage of their income for 20 or 25 years and then forgives the remaining debt.

Return of Senate’s Comprehensive Energy Bill to Move Prior to July 4th Recess; Administration Reviews Clean Power Plan

Legislative Activity

Revival of the Comprehensive Energy Bill

Last week, by unanimous consent, the House Energy and Commerce Committee advanced 11 bills governing energy infrastructure and efficiency. The bills address a range of issues including:  skill preparation for energy-related jobs; improvement to hydroelectric licensing; retrofits for schools; increasing energy and water efficiency for federal facilities and amending monetary thresholds for mergers of FERC-regulated facilities. Several of the issue areas that these bills address were included in the larger comprehensive energy bill that Congress had tried but failed to pass last session.

In the Senate, Chairman Lisa Murkowski (R-AK) of the Energy and Natural Resources Committee has begun the effort to revive the bi-partisan comprehensive energy bill. The all-encompassing 800-page bill from the 114th Congress, S. 2012, as engrossed by the Senate, will serve as the base bill. It will also include several of the agreed-upon items from conference (such as the SAVE Act). The Chairman intends have the bill ready to move to the Senate Floor prior to the July 4 recess. 

This Week’s Hearings:

  • On Tuesday, June 13, the Senate Committee on Environment and Public Works will hold a hearing to consider the following agency nominations:
    • Kristine Svinicki to be reappointed as Chairman of the U.S. Nuclear Regulatory Commission
    • Annie Caputo and David Wright to be Members of the U.S. Nuclear Regulatory Commission
    • Susan Bodine to be Assistant Administrator of the Office of Enforcement and Compliance Assurance of EPA
  • On Wednesday, June 14, the House Committee on Energy and Commerce, Subcommittee on Energy, will hold a hearing titled “States’ Perspectives on Energy Security Planning, Emergency Preparedness, and State Energy Programs.”
  • On Wednesday, June 14, the House Committee on Natural Resources, Subcommittee on Federal Lands, will hold a hearing on the discussion draft on the controversial Sportsmen’s Heritage and Recreational Enhancement Act (SHARE Act). The bill aims to open public lands to hunting, fishing and shooting activities and to prevent new regulations that may limit or block access for those activities.
  • On Wednesday, June 14, the Senate Committee on Environment and Public Works will hold a hearing to examine the Consumer and Fuel Retailer Choice Act (S. 517). The bill would amend the ethanol waiver for Reid vapor pressure limitations under the Clean Air Act.
  • On Wednesday, June 14, the Senate Committee on Appropriations, Subcommittee on Energy and Water, will hold a hearing on the National Nuclear Security Administration’s FY 2018 budget.
  • On Wednesday, June 14, the Senate Committee on Energy and Natural Resources, Subcommittee on Water and Power, will hold a hearing to discuss several pieces of legislation including:
    • S. 677, the Water Supply Permitting Coordination Act;
    • S. 685, the Clean Water for Rural Communities;
    • S. 930, the Western Area Power Administration Transparency Act;
    • S. 1029, to amend the Public Utility Regulatory Policies Act of 1978 to exempt certain small hydroelectric power projects that are applying for relicensing under the Federal Power Act from the licensing requirements of the Act; and
    • S. 1030, to require FERC to submit to Congress a report on certain hydropower projects.
  • On Thursday, June 15, the Senate Committee on Energy and Natural Resources will hold a hearing to “examine the President’s budget request for the U.S. Forest Service for Fiscal Year 2018.”
  • On Thursday, June 15, the House Committee on Natural Resources, Subcommittee on Federal Lands, will hold a hearing on the discussion draft of the Resilient Federal Forests Act of 2017. The bill intends to expedite forest management activities on National Forest System lands, on public lands under the jurisdiction of the Bureau of Land Management, and on Tribal lands in effort to return resilience to overgrown, fire-prone forested lands.
  • On Thursday, June 15, the House Committee on Appropriations, Subcommittee on Interior and Environment, will hold a hearing on the Environmental Protection Agency’s FY 2018 budget. The Administrator of the Environmental Protection Agency, Scott Pruitt, and the Senior Advisor to the Administrator, Holly Greaves, will testify.
  • On Thursday, June 15, the Senate Committee on Appropriations, Subcommittee on Energy and Natural Resources, will hold a hearing on the Forest Service’s FY 2018 budget.

Regulatory Activity

Clean Power Plan

Last Thursday, the Environmental Protection Agency (EPA) sent its proposed review of the Clean Power Plan (CPP) to the Office of Management and Budget (OMB) for review. While the notice did not include details, the proposal is anticipated to seek the repeal of the CPP. This follows EPA Administrator Pruitt’s statements last month that he has not decided whether to craft new rules in addition to repealing the CPP. OMB is anticipated to spend the next few months reviewing the proposal before it is publicly released.

WOTUS

On Thursday, June 29, the EPA’s Small Communities Advisory Subcommittee (SCAS) and Local Government Advisory Committee (LGAC) will meet to discuss and formulate recommendations on revising the definition of ‘‘Waters of the U.S.’’ (WOTUS) under the Clean Water Act, as well as other environmental issues effecting small communities and local governments. This follows EPA’s letter to state governors last month soliciting comments as to how the agency should rewrite WOTUS in response to President Trump’s February 28 executive order directing the agencies to revise the contested Obama Administration rule. The meetings are open to all interested parties who would like to participate. More information on how to submit comments can be found here

House Moves Forward with Financial Services Reform as Banking Looks to Find Its Own Path

Legislative Activity

House Moves CHOICE Act Forward as Senate Banking Committee Discusses Banking Reforms

Last week, the House passed the Financial CHOICE Act of 2017 (CHOICE Act) by a vote of 233-186. The comprehensive deregulatory bill would roll back many of the regulations put in place by the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). For now, passage of the bill amounts to little more than a messaging exercise from the House GOP, since Senate Republicans do not plan to take up the legislation as written. House Financial Services Committee Chairman Jeb Hensarling (R-TX) – the author of the CHOICE Act – has expressed his hope that at least parts of the bill will become law during this Congress. That said, he has also conceded it is a “long game” with some of the bill’s proposals, recognizing the challenging political obstacles of moving the bill through the Senate. Note that the CHOICE Act vote was along party lines except for one Republican, Rep. Walter Jones (R-NC), who voted against the bill.

Meanwhile, on the other side of Capitol Hill, the Senate Banking Committee held a hearing last week titled “Fostering Economic Growth: The Role of Financial Institutions in Local Communities.” Broadly speaking, the hearing focused on banking regulatory reform – especially as it relates to community banks and credit unions. Relatedly, on Thursday, June 15, the Senate Banking Committee is set to hold a hearing on potential regulatory reforms for mid-sized, regional, and large financial institutions.

This Week’s Hearings:

  • On Monday, June 12, the House Appropriations Subcommittee on Financial Services and General Government has scheduled a Department of Treasury budget hearing.
  • On Tuesday, June 13, the Senate Banking, Housing, and Urban Affairs Committee has scheduled a business meeting to consider the following nominations:
    • Mr. Kevin A. Hassett to be Chairman of the Council of Economic Advisers; and
    • The Honorable Pamela H. Patenaude to be Deputy Secretary of Housing and Urban Development
  • On Wednesday, June 14, the House Financial Services Committee has scheduled a markup to consider the following legislation:
    • H.R. 1422, the “Flood Insurance Market Parity and Modernization Act” (Section-by-Section);
    • H.R. 1558, the “Repeatedly Flooded Communities Preparation Act” (Section-by-Section);
    • H.R. 2246, the “Taxpayer Exposure Mitigation Act of 2017” (Section-by-Section);
    • H.R. 2565, To require the use of replacement cost value in determining the premium rates for flood insurance coverage under the National Flood Insurance Act, and for other purposes. (Section-by-Section);
    • H.R. 2868, the “National Flood Insurance Program Policyholder Protection Act of 2017” (Section-by-Section);
    • H.R. ____, the “National Flood Insurance Program Administrative Reform Act of 2017” (Section-by-Section); and
    • H.R. ____, the “21st Century Flood Reform Act” (Section-by-Section)
  • On Thursday, June 15, the Senate Banking, Housing, and Urban Affairs Committee has scheduled a hearing titled “Fostering Economic Growth: Midsized, Regional, and Large Institution Perspective.”

Regulatory Activity

Trump Nominates Otting to Lead OCC

Last week, President Donald Trump nominated Joseph Otting to be Comptroller of the Currency. Mr. Otting served as CEO of Treasury Secretary Steven Mnuchin’s former bank, OneWest, from 2010 to 2015. House and Senate Democrats wasted no time criticizing the nomination, taking aim at OneWest’s foreclosure practices during the financial crisis – similar to the criticisms they voiced during Secretary Mnuchin’s confirmation process. If confirmed by the Senate, Mr. Otting will play a central role in trying to ease financial rules that the Trump Administration blames for stunting economic growth since Dodd-Frank.

SEC Names Co-Directors of Enforcement

Last week, the Securities and Exchange Commission (SEC) announced that Acting Director of the Division of Enforcement Stephanie Avakian and former federal prosecutor Steven Peikin have been named Co-Directors of the Division of Enforcement. The Division of Enforcement is the agency’s largest unit with more than 1,200 investigators, accountants, trial attorneys, and other professionals.

House to Vote on Additional Health Care Legislation; CMS Revises Requirements for Long-Term Care Facilities; CMS Issues Request for Information

Legislative Activity

House to Vote on Additional Health Care Legislation

This week Majority Leader Kevin McCarthy (R-CA) announced that the House of Representatives is scheduled to vote on two pieces of health care legislation. These bills are part of the third phase of Speaker Paul Ryan’s repeal and replace strategy. H.R. 2579, the Broader Options for Americans Act, was introduced by House Committee on Ways and Means Subcommittee on Health Chairman Pat Tiberi (R-OH), and H.R. 1215, the Protecting Access to Care Act of 2017, was introduced by Rep. Steve King (R-IA). H.R. 2579 amends H.R. 1628, the American Health Care Act (AHCA), as passed by the House of Representatives on May 4, 2017. The bill expands financial support for purchasing health insurance by allowing the health insurance tax credit created in the AHCA to also be available for Americans who have lost their group coverage as a result of losing their job. H.R. 1215 establishes provisions governing health care lawsuits where coverage for care was provided or subsidized by the federal government. The intent of the legislation is to reduce the burden the liability system places on the health care delivery system, lower health care costs, and increase health care access. Both pieces of legislation passed their committees of jurisdiction by party line votes and are scheduled for a vote on the House floor by the end of the week. While these bills could be incorporated into the Senate health care package, it is unlikely H.R. 2579 or H.R. 1215 would pass the Senate as stand-alone bills.

This Week’s Hearings:

  • On Monday, June 12, the House Committee on Rules will hold a meeting to formulate a rule on S. 1094, the Department of Veterans’ Affairs Accountability and Whistleblower Protecting Act; H.R. 2372, the Veterans Equal Treatment Ensures Relief and Access Now (VETERAN) Act; H.R. 2579, the Broader Options for Americans Act; and H.R. 2581, the Verify First Act. The witnesses will be announced.
  • On Tuesday, June 13, the Senate Committee on Health, Education, Labor, and Pensions (HELP) will hold a hearing titled “The Cost of Prescription Drugs: How the Drug Delivery System Affects What Patients Pay.” The witnesses will be:
    • Mr. Dan Mendelson, President, Avalere Health
    • Mr. Allan Coukell, Senior Director of Health Programs, Pew Charitable Trusts
    • Dr. Paul Howard, Ph. D, Senior Fellow and Director of Health Policy, Manhattan Institute
    • Dr. Gerard Anderson, Professor of Medicine, Johns Hopkins University School of Medicine
  • On Tuesday, June 13, The Senate Committee on Indian Affairs will hold a hearing on various legislation including S. 1250, to amend the Indian Health Care Improvement Act to improve the recruitment and retention of employees in the Indian Health Service, restore accountability in the Indian Health Service, improve health services, and for other purposes. The witnesses will be announced.
  • On Tuesday, June 13, the House Committee on Rules will hold a hearing on H.R. 1215, the Protecting Access to Care Act of 2017. The witnesses will be announced.
  • On Wednesday, June 14, the House Committee on Energy and Commerce Subcommittee on Health will hold a hearing titled “Examining the Extension of Safety Net Health Programs.” The witnesses will be announced.
  • On Wednesday, June 14, the House Committee on Foreign Affairs will hold a markup of H.R. 1415, the End Neglected Tropical Diseases Act.
  • On Thursday, June 15, the Senate Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies will hold a hearing on proposed budget estimates and justification for FY 2018 for the U.S. Department of Health and Human Services. The witness will be:
    • The Honorable Tom Price, Secretary, U.S. Department of Health and Human Services (HHS)

Regulatory Activity

CMS Revises Requirements for Long-Term Care Facilities

On Monday, June 5, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to revise the requirements that Long-Term Care (LTC) facilities must meet to participate in the Medicare and Medicaid programs. The proposed rule removes provisions prohibiting LTC facilities’ use of binding pre-dispute arbitration, reversing a final rule issued by the Obama Administration in September of 2016. Advocates for the elderly believe allowing pre-dispute arbitration puts nursing home residents at risk, while LTC centers argue it prevents needless lawsuits. The proposed rule is consistent with the Administration’s approach to eliminating unnecessary burdens on providers. The proposed rule was posted in the Federal Register on June 8, 2017, and is open for public comment for 60 days.

CMS Issues Request for Information

On Thursday, June, 8, CMS issued a Request for Information (RFI) titled “Reducing Regulatory Burdens and Improving Health Care Choices to Empower Patients.” The RFI seeks feedback from the public on how to create a more flexible regulatory structure for the individual and small group market and follows the Market Stabilization Final Rule released by CMS on April 18, 2017.The goal of the RFI is to identify regulations that are not necessary and may interfere with regulatory reform policies, and revise them to be more patient centered. The RFI will be published in the Federal Register on June 12, 2017, and is open for public comment for 30 days.

House Armed Services Committee Introduces “By Request” NDAA Bill; Mattis and Dunford to Testify at Armed Services and Appropriations Hearings; Trump Administration Considering Expansion of Laptop Ban

Legislative Activity

House Armed Services Committee Introduces “By Request” NDAA Bill

On June 7, House Armed Services Committee Chairman Mac Thornberry (R-TX) and Ranking Member Adam Smith (D-WA) introduced H.R. 2810, the “by request” version of the Fiscal Year 2018 National Defense Authorization Act (NDAA).

This procedural measure is traditionally the first step in the legislative process for the NDAA. The introduced bill only reflects the legislative proposals submitted by the Department of Defense, but Armed Services Committee’s proposals will be incorporated into the bill during its markup.

The Committee is expected to hold its first markup of the legislation on June 28.

Mattis and Dunford to Testify at Armed Services and Appropriations Hearings

This week, Secretary of Defense James Mattis and Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford will testify during four House and Senate hearings on the Department of Defense’s Fiscal Year 2018 budget.

Secretary Mattis and Gen. Dunford will discuss the Pentagon’s budget before the House and Senate Armed Services Committees, as well as the House and Senate Appropriations Subcommittees on Defense.

Their testimony will come as the House and Senate Armed Services Committees prepare to begin consideration of the NDAA in late June.

This Week’s Hearings:

  • On Monday, June 12, the House Armed Services Committee has scheduled a hearing titled “The Fiscal Year 2018 National Defense Authorization Budget Request from the Department of Defense.”
  • On Tuesday, June 13, the Senate Armed Services Committee has scheduled a hearing titled “Department of Defense Budget Posture.”
  • On Tuesday, June 13, the Senate Armed Services Subcommittee on Seapower has scheduled a hearing titled “Navy and Marine Corps Aviation Programs.”
  • On Tuesday, June 13, the House Appropriations Subcommittee on Homeland Security has scheduled a hearing titled “Immigration and Customs Enforcement &Customs and Border Protection FY18 Budget Request.”
  • On Wednesday, June 14, the Senate Homeland Security and Governmental Affairs Committee has scheduled a hearing titled “Ideology and Terror: Understanding the Tools, Tactics, and Techniques of Violent Extremism.”
  • On Wednesday, June 14, the Senate Appropriations Subcommittee on Defense has scheduled a hearing titled “Review of the FY 2018 Budget Request for the U.S. Dept. of Defense.”
  • On Wednesday, June 14, the House Homeland Security Committee has scheduled a markup of H.R. 2825 to amend the Homeland Security Act of 2002 to make certain improvements in the laws administered by the Secretary of Homeland Security and for other purposes.
  • On Thursday, June 15, the House Appropriations Subcommittee on Defense has scheduled a Department of Defense budget hearing.
  • On Thursday, June 15, the Senate Armed Services Committee has scheduled a hearing titled “Posture of the Department of the Navy.”
  • On Friday, June 16, the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies has scheduled a Federal Bureau of Investigation budget hearing.

Executive Branch Activity

Trump Administration Considering Expansion of Laptop Ban

In testimony before the House Homeland Security Committee last week, Homeland Security Secretary John Kelly confirmed that the Trump Administration is considering whether to expand a ban on large electronic devises in airplane cabins to 71 additional airports in Europe, Africa, and the Middle East.  The restrictions, which currently apply to approximately 350 flights a week originating in 10 airports primarily in the Middle East, would expand to up to 400 flights a day, posing significant logistical challenges for airlines and airport administrators around the world.

Secretary Kelly confirmed that Deputy Homeland Security Secretary Elaine Duke will attend a conference in Malta next week where the US Government will present proposed security standards in an effort to mitigate the security risk posed by these electronics.

Pentagon’s BRAC Proposal Includes New Savings Requirement

The Defense Department’s Fiscal Year 2018 budget proposal requests authority from Congress to conduct a new round of base realignment and closures (BRAC) in 2021. Peter Potochney, the Acting Assistant Secretary of Defense for Energy, Installations, and the Energy, reassured the Senate Appropriations Subcommittee on Military Construction, Veterans Affairs, and Related Agencies in a hearing last week that the proposal includes a requirement that the Secretary certify savings will follow within 5 years of the recommendations.  He also noted that the recommendation would limit the Defense Secretary’s ability to recommend proposals that do not show cost savings within 20 years.

According to the Government Accountability Office, the up-front costs of the Defense Department’s 2005 BRAC round have increased from $21 billion to approximately $35.1 billion by 2011, a fact that some lawmakers have cited to argue against a new BRAC round.

During his testimony, Potochney also said that the proposal would not be limited to closing facilities on existing bases, but could also include the closure of entire facilities, adding “[e]verything’s on the table.”

Congressional Hearings Will Focus on the State and Defense Department’s FY 2018 Budgets, While the Senate Focuses on an Iran Sanctions Bill

Most of Washington was focused on last Thursday’s Senate Intelligence Committee hearing, where former Director of the Federal Bureau of Investigation (FBI) James Comey testified about circumstances that may have contributed to his termination.  President Trump announced on Wednesday that he was nominating Christopher Wray to serve as Director of the Federal Bureau of Investigations (FBI).

Both chambers of Congress are in session this week.  The Senate will resume debate of S. 722, an Iran sanctions bill, on Monday evening.  A final vote on the bill is expected before the 4 July recess.

The White House announced last Friday that President Trump will soon travel to Poland.  The White House said the trip “will reaffirm America’s steadfast commitment to one of [its] closest European allies and emphasize the Administration’s priority of strengthening NATO’s collective defense.”  Also Friday, President Trump announced his intent to nominate Jeffrey Gerrish to serve as Deputy U.S. Trade Representative for Asia, Europe, the Middle East & Industrial Competitiveness, and Nathan Alexander Sales to serve as Coordinator for Counterterrorism at the State Department, among other nominations.

Qatar – Gulf Dispute Regarding Terrorism Financing

Egypt, Saudi Arabia, Bahrain and the United Arab Emirates severed diplomatic ties with Qatar last week, after accusing the country of supporting terrorism.

At a joint press conference with Romanian President Klaus Iohannis on Friday, President Trump spoke of his recent trip to the Middle East and Europe, where he said the focus of the trip was on strengthening alliances in order to fight terrorism. He said of countering terrorism financing:  “I addressed a summit of more than 50 Arab and Muslim leaders, a unique meeting in the history of nations, where key players in the region agreed to stop supporting terrorism, whether it be financial, military or even moral support.”  He added:

“The nation of Qatar, unfortunately, has historically been a funder of terrorism at a very high level.  And in the wake of that conference, nations came together and spoke to me about confronting Qatar over its behavior.”

President Trump said that one of his priorities is to get countries to stop facilitating terrorism financing.  He said:  “For Qatar, we want you back among the unity of responsible nations.  We ask Qatar and other nations in the region to do more and do it faster.”  President Trump also spoke with President Abdel Fattah Al Sisi of Egypt on Friday; Crown Prince Mohamed bin Zayed Al Nahyan of the United Arab Emirates on Wednesday; Amir Sheikh Tameem bin Hamad Al Thani of Qatar on Wednesday; and the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud of Saudi Arabia on Tuesday.

Secretary of State Rex Tillerson gave brief remarks to the press on Friday regarding the situation in the Middle East.  He said:

“We ask that there be no further escalation by the parties in the region.  We call on Qatar to be responsive to the concerns of its neighbors.  Qatar has a history of supporting groups that have spanned the spectrum of political expression, from activism to violence.  The emir of Qatar has made progress in halting financial support and expelling terrorist elements from his country, but he must do more and he must do it more quickly.  Others must also continue to eliminate factions of support for violent organizations within their own borders.  Again, that was a commitment made by all at the summit.  We call on the Kingdom of Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt to ease the blockade against Qatar.”

During a Senate Armed Services Committee hearing last week, Air Force Secretary Heather Wilson and Chief of Staff Gen. David Goldfein testified U.S. operations at the Al Udeid Air Base will continue without interruption, despite the diplomatic feud between Qatar and other Arab states. Both officials noted, however, that the Pentagon has backup plans in place, if necessary.

Syria – U.S. Shoots Down Unmanned Aircraft That Fired on Coalition Troops

Officials confirmed that a U.S. aircraft shot down an armed pro-Syrian government unmanned aerial vehicle (UAV) last Thursday after it had fired on coalition forces in southern Syria. This incident was the first time that pro-Assad forces in southeastern Syria have fired on U.S.-backed fighters and their coalition advisers.

The pro-regime UAV was shot down after it dropped a weapon near a position occupied by coalition personnel. In a statement, the U.S. Central Command clarified that it was focused on fighting ISIS and not interested in confronting the Assad regime or its allies, but noted that the “coalition will take appropriate measures to protect our forces.”

NATO – President Trump Reaffirms U.S. Commitment to Collective Defense

During a joint press conference with the Romanian president on 9 June, President Trump provided reassurance that the U.S. remains committed to defending other members of NATO. Responding to a question from a reporter, President Trump said, “[y]es, absolutely I’d be committed to Article 5,” but noted that NATO allies should increase their military spending to ensure that NATO remains a “very, very strong force.”

The White House later reaffirmed the commitment in a statement announcing the President Trump’s plans to visit Poland next month. The President drew criticism last month when he failed to mention U.S. commitment to Article 5 during a speech to NATO leaders.

Canada – Boeing Moves Forward with Trade Complaint

U.S. aerospace company, Boeing, is moving ahead with its complaint against Montreal-based Bombardier after a U.S. International Trade Commission preliminary finding that Bombardier’s trade practices are causing injury to Boeing and the U.S. aircraft sector. Boeing has accused the Canadian company of selling its new C-Series aircraft to Delta Airlines below the price of production. Boeing is also arguing that Bombardier benefits from unfair subsidies from the Canadian government.

This case could heighten trade tensions between the U.S. and Canada. After the U.S. initiated the Bombardier investigation last month, Canadian Foreign Minister Chrystia Freeland announced that the government would review military procurement that relates to Boeing. In a defense policy report released last week, the Canadian government deferred its decision to purchase eighteen of Boeing’s F/A-18E/F Super Hornet fighter jets, stating that it was “continuing to explore” the acquisition of an interim fighter aircraft.

Indonesia – Maritime Security Discussed

Last week, Secretary of Defense James Mattis met with Indonesian Coordinating Minister for Maritime Affairs, Luhut Pandjaitan. According to a Pentagon spokesperson, Secretary Mattis and Minister Pandjaitan exchanged views on the regional maritime security environment in Southeast Asia, countering violent extremism, and the threat posed by returning foreign fighters. The two also discussed the importance of supporting Indonesia’s defense modernization efforts through strengthening bilateral training, interoperability, and defense trade.

Congressional Hearings This Week

  • On Monday, 12 June, the House Armed Services Committee is scheduled to hold a hearing titled “The Fiscal Year 2018 National Defense Authorization Budget Request from the Department of Defense.”
  • On Tuesday, 13 June, the Senate Armed Services Committee is scheduled to hold a hearing titled “Department of Defense Budget Posture.”
  • On Tuesday, 13 June, the Senate Foreign Relations Subcommittee on International Cybersecurity Policy is scheduled to hold a hearing titled “State-Sponsored Cyberspace Threats: Recent Incidents and U.S. Policy Response.”
  • On Tuesday, 13 June, the House Foreign Affairs Subcommittee on the Middle East and North Africa is scheduled to hold a hearing titled “Challenges and Opportunities for the U.S.-Saudi Relationship.”
  • On Tuesday, 13 June, the Senate Appropriations State-Foreign Operations Subcommittee is scheduled to hold a hearing titled “Review of the Fiscal Year (FY) 2018 Budget for the U.S. Department of State.” Secretary of State Tillerson is expected to testify.
  • On Tuesday, 13 June, the Senate Foreign Relations Committee is scheduled to hold a hearing titled “Review of the FY 2018 State Department Budget Request.” Secretary Tillerson is expected to testify.
  • On Wednesday, 14 June, the House Appropriations State-Foreign Operations Subcommittee is scheduled to hold a hearing on the Department of State’s budget. Secretary Tillerson is expected to testify.
  • On Wednesday, 14 June, the House Foreign Affairs Committee is scheduled to hold a budget hearing for the State Department’s FY 2018 budget. Secretary Tillerson is expected to testify.
  • On Wednesday, 14 June, the House Foreign Affairs Subcommittee on Global Health is scheduled to hold a markup of H.R. 1415, the End Neglected Tropical Diseases Act.
  • On Wednesday, 14 June, the House Foreign Affairs Subcommittee on Global Health is scheduled to hold a hearing titled “Africa’s Current and Potential Famines.”
  • On Wednesday, 14 June, the Senate Foreign Relations Subcommittee on Europe and Regional Security Cooperation is scheduled to hold a hearing titled “Southeast Europe: Strengthening Democracy and Countering Malign Foreign Influence.”
  • On Wednesday, 14 June, the Senate Homeland Security and Governmental Affairs Committee is scheduled to hold a hearing titled “Ideology and Terror: Understanding the Tools, Tactics, and Techniques of Violent Extremism.”
  • On Wednesday, 14 June, the Senate Security and Cooperation in Europe Commission is scheduled to hold a hearing titled “The Romanian Anti-Corruption Process: Success and Excesses.”
  • On Wednesday, 14 June, the Senate Appropriations Subcommittee on Defense is scheduled to hold a hearing titled “Review of the FY 2018 Budget Request for the U.S. Dept. of Defense.”
  • On Thursday, 15 June, the House Appropriations Defense Subcommittee is scheduled to hold a hearing on the Department of Defense’s budget. Secretary of Defense Jim Mattis and Joint Chiefs of Staff Gen. Joseph Dunford are expected to testify.
  • On Thursday, 15 June, the House Foreign Affairs Subcommittee on Terrorism, Nonproliferation, and Trade has scheduled a hearing titled “Foreign Military Sales: Process and Policy.”
  • On Thursday, 15 June, the House Foreign Affairs Subcommittee on the Middle East and North Africa is scheduled to hold a hearing titled “Russia’s Strategic Objectives in the Middle East and North Africa.”
  • On Thursday, 15 June, the House Foreign Affairs Subcommittee on Asia and the Pacific is scheduled to hold a markup of H.R. 535, the Taiwan Travel Act; H.R. 2061, the North Korean (DPRK) Human Rights Reauthorization Act of 2017; and H.R. 2397, the DPRK Act of 2017.
  • On Thursday, 15 June, the House Foreign Affairs Subcommittee on Asia and the Pacific is scheduled to hold a hearing titled “Renewing Assurances: Strengthening U.S.-Taiwan Ties.”
  • On Thursday, 15 June, the House Judiciary Committee is scheduled to hold a hearing titled “Data Stored Abroad: Ensuring Lawful Access and Privacy Protection in the Digital Era.”
  • On Thursday, 15 June, the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law is scheduled to hold a hearing titled “Recent Trends in International Antitrust Enforcement.”

Looking Ahead

Washington will focus on the following upcoming events:

  • 12 June: USTR deadline for written comments re: NAFTA
  • 18-20 June: SelectUSA Investment Summit in National Harbor, Maryland
  • 19 June: President Trump will welcome Panamanian President Juan Carlos Varela to the White House
  • 27 June: USTR hearing on NAFTA
  • Before August: Congress to vote on the raising the debt ceiling

Senators Seek Hearing on Sinclair-Tribune Merger

Legislative Activity

Senators Seek Hearing on Sinclair-Tribune Merger

On June 5, a group of senators including Sens. Maria Cantwell (D-WA), Al Franken (D-MN), and Corey Booker (D-NJ) sent a letter to Sen. John Thune (R-SD), Chairman of the Senate Committee on Commerce, Science and Transportation (Senate Commerce Committee) and Sen. Chuck Grassley (R-IA), chairman of the Senate Committee on the Judiciary requesting that both committees “hold hearings to examine the proposed acquisition of Tribune Media (Tribune) by Sinclair Broadcasting (Sinclair),” which was announced in early May. The senators also requested that both committees hold hearings on the Federal Communications Commission’s (FCC) April 2017 Order on Reconsideration (Order) in which it reinstated the “UHF discount,” which allows commercial broadcast television stations to discount the audience reach of its ultra-high frequency television stations (generally those occupying frequencies between 470 MHz and 890 MHz) when calculating compliance with the FCC’s national television ownership rule, which prohibits a single entity from owning television stations that reach more than 39% of the total television households in the country in the aggregate. In the letter, the senators stated that “Sinclair currently owns 173 stations and reaches more than 38% of the nation” while “Tribune has 42 stations . . . and reaches more than 43% of the nation.” The group then argued that the acquisition of Tribune by Sinclair would create “the largest television broadcast company in the United States.” They expressed concerns about allowing such media concentration, including its “impact on the public interest,” worrying that the merger would “harm competition.” Regarding their request for hearings on the FCC’s Order, the group noted that the Order relaxed “the limits on how many stations a TV group could own by revising how the agency calculates the audience reached by broadcasters, thereby paving the way for mergers and acquisitions that would otherwise be barred by regulators.” The group concluded by asking both committees to hold hearings “after the companies have filed the requisite paperwork” with the FCC and the Department of Justice.

This Week’s Hearings:

  • On Tuesday, June 13, the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection has scheduled a hearing titled “Disrupter Series: Update on IOT Opportunities and Challenges.” The witnesses will be announced.
  • On Tuesday, June 13, the House Energy and Commerce Subcommittee on Communications and Technology has scheduled a hearing titled “Promoting Security in Wireless Technology.” The witnesses will be announced.
  • On Wednesday, June 14, the Senate Commerce Committee has scheduled a hearing titled “Paving the Way for Self-Driving Vehicles.” The witnesses will be:
    • Mr. Mitch Bainwol, President and CEO, Alliance of Automobile Manufacturers
    • Mr. Rob Csongor, Vice President and General Manager of Automotive Business, NVIDIA Corporation
    • Mr. John Maddox, President and CEO, American Center for Mobility
    • Ms.Colleen Sheehey-Church, National President, Mothers Against Drunk Driving
  • On Tuesday, June 13, the House Judiciary Subcommittee on the Constitution and Civil Justice has scheduled a business meeting to examine lawsuit abuse and the Telephone Consumer Protection Act.

Regulatory Activity

FCC Imposes $975,000 Against ATI for Failure to Make Federal Contributions

On Thursday, June 8, the FCC released a Forfeiture Order against Advanced Tel, Inc. (ATI) — a “California-based non-dominant interexchange carrier that provides interstate, international, and intrastate long distance telecommunications services as a switchless reseller in 25 states.” In the Forfeiture Order, the Commission claims that ATI failed to file data or pay into certain federal programs, including the Universal Service Fund, the Telecommunications Relay Service Fund, and the Local Number Portability cost recovery mechanism. The penalty amount—$975,000—represents a substantial reduction to the $1,588,988 forfeiture proposed in the FCC’s Notice of Apparent Liability for Forfeiture (NAL). In response to the NAL, ATI did not dispute the underlying facts, but the company did claim an inability to pay, and challenged the FCC’s statute of limitations determination, arguing that an expired tolling agreement between the Enforcement Bureau and ATI reduced the scope of the violations. The FCC declined to reach the merits of those arguments, finding that the reduction based on the company’s inability to pay resulted in a lower penalty for ATI than a reduction based on the statute of limitations argument.

FirstNet Expects to Deliver State Plans on June 19

FirstNet held a state plan “kick-off” meeting in Dallas, Texas on June 7-8 and is targeting June 19 for the delivery of its initial state plans for the Radio Access Networks (RANs) for each state. FirstNet is working to deliver a nationwide broadband network dedicated to public safety users through a public-private partnership. The initial state plans will be delivered to states via an online portal. During the state plan review process, states will have 45 days to review the initial state plans and make comments. FirstNet will have 45 days to review and respond to the comments. After that step, the state plans would be made official. Once the final state plans are delivered, states will have 90 days to make a decision to (1) opt-in and have AT&T build the RAN for their state, or (2) opt-out and seek to build their own network. If a state has no comments on the original version of its state plan, it can notify FirstNet and the 90-day period for deciding whether to opt in or out can begin early. A state can notify FirstNet at any point that it wants AT&T to build its RAN.

FY 2018 Transportation Appropriations; Presidential Events on Infrastructure Initiative; President Appoints Deputy FAA Administrator

Legislative Activity

Congress Begins Evaluating FY 2018 Transportation Appropriations

This week, the House and Senate Appropriations Subcommittees on Transportation, Housing and Urban Development, and Related Agencies will hold hearings on FY 2018 appropriations for the U.S. Department of Transportation (DOT). Transportation Secretary Elaine Chao will testify on Tuesday at the Senate Subcommittee hearing and on Thursday at the House Subcommittee hearing.

The President’s FY 2018 Budget Proposal would fully fund highway and transit formula programs at their FAST Act-authorized levels, but would eliminate funding for the Transportation Infrastructure Generating Economic Recovery (TIGER) grant program and limit funding for the Capital Investment Grant (CIG) program, commonly known as New Starts/Small Starts, to current projects. However, there is significant Congressional support for the TIGER grant program and the New Starts/Small Starts program and it is not likely the final FY 2018 appropriations will reflect the FY 2018 Budget Proposal’s elimination of funding for these programs. The Budget also proposes to end all General Fund transfers to the Highway Trust Fund, effectively resulting in a $95 billion cut in surface transportation funding over seven years, starting with FY 2021. This aspect of the 2018 Budget proposal is unrelated to FY 2018 spending decisions, so should be seen more as call for greater fiscal discipline – no more General Fund supplements to the Highway Trust Fund – than as a budget priority for the coming fiscal year.

There is likely not sufficient time before the start of FY 2018 to consider all 12 appropriations bills individually and Congress may move directly to an Omnibus appropriations act for FY 2018. We expect that program funding levels in the Congressional transportation appropriations bills will vary significantly from the President’s FY 2018 Budget Proposal.

President Held Events Focused on Infrastructure Initiative

Last week, President Trump held several events intended to increase Congress’ and the Nation’s focus on the President’s infrastructure proposal.

On Monday, the President held a White House event on air traffic control (ATC) reform, during which he supported a proposal similar to House Transportation and Infrastructure Committee Chairman Bill Shuster’s (R-PA) ATC reform proposal included in the Aviation Innovation, Reform, and Reauthorization (AIRR) Act in 2016. The President’s proposal was met with responses ranging from trepidation to opposition from many stakeholder groups. Opposition to Chairman Shuster’s ATC reform proposal stalled the AIRR Act in the last Congress.

On Tuesday, the President gave a speech about the Nation’s inland waterways. On Thursday the President met with a bipartisan group of mayors and governors to discuss infrastructure. The meeting was intended to be a listening session for the White House, and staff asked the mayors and governors present to discuss the largest federal impediments to completing infrastructure projects. On Friday the President held an event at DOT focused on “Roads and Rail Regulatory Reform.” The President discussed streamlining the environmental and permitting process, announced the development of a council to assist cities and states to navigate the review process, and discussed establishing a “dashboard” to help the public track major infrastructure projects throughout the permitting process.

President Trump Appoints Daniel Elwell as Deputy Administrator at FAA

President Trump is appointing Daniel Elwell to do be the Deputy Administrator of the Federal Aviation Administration (FAA). Elwell previously served as the FAA’s Assistant Administrator for Policy under President George W. Bush.

This Week’s Hearings:

  • On Tuesday, June 13, the House Energy and Commerce Subcommittee on Digital Commerce and Consumer Protection has scheduled a hearing titled “Disrupter Series: Update on IOT [Internet of Things] Opportunities and Challenges.” The witnesses will be announced.
  • On Tuesday, June 13, the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has scheduled a hearing titled “Review of the FY2018 Budget Request for the U.S. Dept. of Transportation.” The witness will be:
    • The Honorable Elaine Chao, Secretary, U.S. Department of Transportation
  • On Wednesday, June 14, the Senate Commerce, Science, and Transportation Committee has scheduled a hearing titled “Paving the Way for Self-Driving Vehicles.” The witnesses will be:
    • Mitch Bainwol, President and CEO, Alliance of Automobile Manufacturers
    • Rob Csongor, Vice President and General Manager of Automotive Business, NVIDIA Corporation
    • John Maddox, President and CEO, American Center for Mobility
    • Colleen Sheehey-Church, National President, Mothers Against Drunk Driving
  • On Thursday, June 15, the House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies has scheduled a Department of Transportation budget hearing. The witness will be:
    • The Honorable Elaine Chao, Secretary, U.S. Department of Transportation

Senate to Focus on Russia and Nominations in Return from Recess

Senate Legislative Activity

The Senate will next convene at 3:00 pm on Monday, June 5, 2017.

On Monday, following any Leader remarks, the Senate will proceed to the consideration of Calendar #107, S.Res.176, commemorating the 50th anniversary of the reunification of Jerusalem, with the time until 5:30 pm equally divided in the usual form. At 5:30 pm, the Senate will vote on adoption of the resolution.

On Tuesday, June 6th, at 2:15 pm, the Senate will vote on confirmation of Executive Calendar #54, the nomination of Courtney Elwood, of Virginia, to be General Counsel of the Central Intelligence Agency.

Also on Tuesday, following disposition of the Elwood nomination, the Senate will proceed to consideration of S.1094, the Department of Veterans Affairs Accountability Act; agree to the committee-reported substitute amendment; have 3 hours of debate, equally divided; and vote (expected by voice) on passage of the bill, as amended.

Monday June 5th at 5:30 pm – 1 roll call vote

  • Adoption of Calendar #107, S.Res.176, commemorating the 50th anniversary of the reunification of Jerusalem

Tuesday June 6th at 2:15 pm – 1 roll call vote

  • Confirmation of Executive Calendar #54, the nomination of Courtney Elwood, to be General Counsel, CIA

Tuesday June 6th at approximately 6:15 pm – 1 voice vote expected

  • Passage of S.1094, the Department of Veterans Affairs Accountability Act, as amended

House Legislative Activity

On Monday, June 5, the House is not in session. No votes are expected.

On Tuesday, the House will meet at 12:00 pm for morning hour and 2:00 pm for legislative business. Votes will be postponed until 6:30 pm.

The following legislation will be considered under suspension of the rules:

  1. H.Res. 354 – Condemning the violence against peaceful protesters outside the Turkish Ambassador’s residence on May 16, 2017, and calling for the perpetrators to be brought to justice and measures to be taken to prevent similar incidents in the future, as amended (Sponsored by Rep. Ed Royce / Foreign Affairs Committee)
  2. H.R. 390 – Iraq and Syria Genocide Emergency Relief and Accountability Act of 2017, as amended (Sponsored by Rep. Christopher Smith / Foreign Affairs Committee) 
  3. H.Res. 355 – Condemning in the strongest terms the terrorist attacks in Manchester, United Kingdom, on May 22, 2017, expressing heartfelt condolences, and reaffirming unwavering support for the special relationship between our peoples and nations in the wake of these attacks (Sponsored by Rep. Gregory Meeks / Foreign Affairs Committee)

On Wednesday and Thursday, the House will meet at 10:00 am for morning hour and 12:00 pm for legislative business.

On Friday, the House will meet at 9:00 am for legislative business. Last votes expected no later than 3:00 pm.

H.R. 2213 – Anti-Border Corruption Reauthorization Act of 2017 (Subject to a Rule) (Sponsored by Rep. Martha McSally / Homeland Security Committee)

H.R. 10 – Financial CHOICE Act of 2017 (Subject to a Rule) (Sponsored by Rep. Jeb Hensarling / Financial Services Committee)

The following legislation will be considered under suspension of the rules:

  1. H.Con.Res. 33 – Designating the George C. Marshall Museum and George C. Marshall Research Library in Lexington, Virginia, as the National George C. Marshall Museum and Library (Sponsored by Rep. Bob Goodlatte / Education and the Workforce Committee)

Sources:  www.democrats.senate.govhttp://www.majorityleader.gov/

State Attorneys General June 5 Update

Squire Patton Boggs’ State Attorneys General Practice Group is comprised of lawyers who have served at senior levels in state AG offices around the country and whose practices focus, to one degree or another, on representing clients before these increasingly assertive and powerful, yet often overlooked, government agencies, as explained in detail here.

In these updates, we will call attention to the most noteworthy state AG news or developments emerging in the previous week.

Advocacy

On June 1, Democratic governors and state AGs launched the “United States Climate Alliance,” which is a group of states committed to upholding the environmental promises established through the Paris Climate Accord. Responding to President Trump’s decision to withdraw from the Paris Climate Accord, Pennsylvania AG Josh Shapiro stated that he is “incredibly distressed and disturbed.” Massachusetts AG Maura Healey voiced her disappointment with President Trump’s recent environmental actions and vowed to “hold the line on important measures that have been put in place to protect our habitat and prevent climate change.” AG Healey went on to suggest that President Trump has placed “hundreds of thousands” of clean energy jobs in jeopardy.  The AGs did not discuss specific legal strategies but emphasized their commitment to continue challenging President Trump’s “unfortunate executive actions.”

Litigation

Ohio AG Mike DeWine sued five major prescription opioid manufacturers alleging that the companies “helped unleash a health care crisis that has had far-reaching financial, social, and deadly consequences in the State of Ohio.” The lawsuit asserts that the drug companies purposefully mislead Ohioans by presenting false marketing information regarding the risks and benefits of prescription opioids. AG DeWine said, “[t]hese drug manufacturers led prescribers to believe that opioids were not addictive, that addiction was an easy thing to overcome or that addiction could actually be treated by taking even more opioids.” The lawsuit alleges that the companies violated the Ohio Consumer Sales Practices Act and falsely inflated the benefits of opioid medication.

In Safetech IoT Settlement, New York Attorney General Outlines Reasonable Security Program

By Christopher M. Hoff and Elliot Golding on June 1, 2017 POSTED IN CYBERSECURITY

In the first state Attorney General action against a wireless security company for failing to implement adequate security in its Internet of Things (IoT) devices, the New York Attorney General recently settled with wireless lock company Safetech.  According to the settlement, there were alleged security shortcomings despite the fact that the company promised “Privacy When You Want It, Security When You Need It” and represented that its locks protected belongings by securing areas.  The Attorney General alleged that the security deficiencies and representations that Safetech made ran contrary to New York state laws that prohibit deceptive acts or practices and false advertising, and that give the Attorney General power to enjoin repeated fraudulent or illegal acts.

The settlement mirrors similar enforcement actions taken by the Federal Trade Commission in the IoT space, such as the D-Link caseASUS case, and TRENDnet case.  These increasingly frequent regulator enforcement actions indicate that IoT device manufacturers should carefully think about security when designing devices.

The Safetech enforcement action started after independent researchers reported in August 2016 that Safetech did not encrypt its users’ passwords when transmitted from a smartphone to the locks.  Moreover, the researchers revealed that Safetech did not force users to reset default passwords, which could be discovered easily by brute force attacks.  The Attorney General subsequently investigated the company and its practices, ultimately alleging that the security deficiencies discovered by the independent researchers could leave consumers susceptible to hacking and physical theft.  According to the settlement, Safetech must now implement a comprehensive security program.  The outline of that program sheds light on what the New York Attorney General may consider “reasonable security” for IoT devices.

The settlement agreement requires Safetech to encrypt all passwords and other security credentials; and prompt users to change the default password during the initial setup process.  Safetech also agreed to establish a written comprehensive security program reasonably designed to accomplish the following objectives: (1) address security risks of devices that use security information, and (2) protect the privacy, security, confidentiality, and integrity of security information. The program must include:

  • Accountable employee designation;
  • Identification of material risks that could lead to unauthorized access to the locks and affect privacy, security, confidentiality, and integrity of security information;
  • Performance of risk assessments on operations including employee training, product design, secure software design, response to third party security vulnerability reports, as well as prevention, detection and response to attacks and other security failures;
  • Implementation of reasonable safeguards against risks identified during the risk assessment;
  • Regular testing of the effectiveness of the safeguards;
  • Reasonable vendor management, including contracts that address security; and
  • Adjustment of the security program in light of testing.

The bottom line is that the FTC is not the only cop on the beat.  Attorneys General are becoming increasingly active in the IoT space.  Companies should carefully consider the security they implement and take into account recommendations issued by regulators.

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