August 2016

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Convention Recap

Over the past two weeks, both the Republican & Democratic Parties held their conventions in Cleveland & Philadelphia, respectively.

At the Republican National Convention (RNC) in Cleveland, the Republican Party nominated Donald Trump for President & Mike Pence for Vice President. Besides the nominees, key speeches at the RNC included Melania Trump, wife of nominee Donald Trump; Ivanka Trump, daughter of nominee Donald Trump; Peter Thiel, co-founder of PayPal; and Rudy Guliani, former Mayor of New York City. Ted Christian, DMGS Director, served as the Chief Whip of the PA Delegation at the RNC.

During the Democratic National Convention, the Democratic Party nominated Hillary Clinton for President and Tim Kaine for Vice President. Notable speeches included Michelle Obama, First Lady of the United States; Vice President Joe Biden; US Senator Cory Booker; and a performance by pop stars Katy Perry and Lenny Kravitz. Philadelphia was also center-stage during the DNC, with it's food, arts, and culture scenes serving as a favorite for convention attendees.

Currently, FiveThirtyEight adjusted national polling averages have Clinton at 41.4%, Trump at 40.5%, and Libertarian candidate Gary Johnson polling at 7.5% with 98 days left in the presidential race.

 

WASHINGTON, DC UPDATE

Congressional Appropriations
To date, no appropriation bill has successfully reached President Obama’s desk. Last minute efforts in the Senate to move the Mil-Con Zika bill failed before the Senate left for recess on July 14. With both chambers out of session until September, and the looming elections, the further movement of any appropriations in 2016 is unlikely, leaving little question that FY 2017 will begin with a continuing resolution. Each of the 12 discretionary spending bills currently stand as shown:
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In a 92-2 vote on July 14, the Senate passed the Comprehensive Addiction & Recovery Act which would authorize the Attorney General and Secretary of Health and Human Services to award grants to address the national epidemics of prescription opioid abuse and heroin use, and to provide for the establishment of an inter-agency task force to review, modify, and update best practices for pain management and prescribing pain medication.

The bill was first introduced by Sen. Sheldon Whitehouse (D-RI) and passed the Senate in a 94-1 vote on 3/9/16. It then passed the House with a substitute amendment that incorporated 18 other opioid abuse bills in a 407 – 5 vote.  The bills subsequently passed through a conference committee to reconcile the two versions of the bill. Concerns remain that the bill, while authorizing funding for treatment and recovery programs, is not sufficiently funded after attempts to add $600 million in emergency funding to the bill failed in both the House and Senate. The bill currently awaits the President Obama’s signature 

GMO Food Labeling Measure

The White House announced on July 13 that President Obama would likely sign the GMO food labeling bill as resolved in the House on July 14. The bill, S 764, would subject food producers to a mandatory labeling procedure for all non-meat genetically modified organisms (GMO). The provision would require the US Department of Agriculture to develop a standardized label for GMOs within two years of enactment that would include the creation of a threshold for GMO content necessitating labeling

The measure would bar any consideration of bioengineering during the safety evaluation of a product and would preempt existing state regulations on the issue of GMO labeling. The bill defines a GMO as any item that contains genetic material modified through genetic recombination, referred to as recombinant DNA, that couldn’t be achieved through conventional breeding or isn’t otherwise found in nature.

The bill passed over the concerns of consumer groups that oppose the exemption of meat products. 

House Mental Health Bill

In a 422-2 vote on July 6, the Helping Families in Mental Health Crisis Act passed through the House. The bill authored by Rep. Tim Murphy (R-PA) would make available psychiatric, psychological, and supportive services for individuals with mental illness and families in mental health crisis. It would create new federal organizations and positions designed to address mental health care and expands the resources available to individuals with mental health disease. It also includes provisions which would expand Medicare Incentive payments for meaningful EHR use to clinical psychiatrists. However, the Senate presently lacks a suitable companion bill. 

DoT TIGER Grants

The Department of Transportation is in the process of awarding $500 million in funding for forty national transportation projects under the Transportation Investment Generating Economic Recovery (TIGER) program established by the Obama Administration. Among the awards is a $19 million grant to connect downtown Pittsburgh to surrounding communities. Currently, President Obama is seeking $1.25 billion in funding for FY 2017, far more than the House proposal of $450 million & the Senate proposal of $525 million. 

Healthcare Industry Anti-Trust Lawsuit

The US Department of Justice is suing to stop the merger of Anthem Inc. & Cigna Corp. as well as Aetna Inc. & Humana Inc. Justice Department officials are concerned that the deals would decrease competition in the health insurance market as the five largest companies could become three. 

Child Nutrition Programs

The Senate is close to passing a school nutrition reauthorization bill that would extend funding for the National School Lunch Program, School Breakfast Program, & the Summer Food Service Program, among other free & reduced-price meal programs for children. The various programs would receive $30 billion in funding over the five-year authorization. While the Senate reauthorization has bipartisan support, the House companion has only Republican support due to partisan provisions. However, there remains hope that a conference committee may be able to approve a reauthorization this fall. 

FDA Fitness Tracker & App Regulation

The Food & Drug Administration (FDA) declined to regulated fitness trackers and mobile health & wellness applications in a guidance published July 28. The FDA defined exempt technologies as those tools intended only for general wellness, such as weight management, physical fitness, sleep, or mental acuity trackers, applications, and games. The guidance clarified that the FDA would seek to regulate any product that claims the ability to treat or diagnose a specific disease or condition.

STATEWIDE UPDATES

 

New Jersey

NJ Legislative Spotlight: A4048/"Airbnb Tax"

Online marketplaces such as Airbnb that offer short-term house and room rentals would be taxed like hotels under a proposal introduced in the state Assembly this week. The bill, A-4048 would impose a 7 percent sales and use tax and a 5 percent transient accommodation fee on accommodations booked through Airbnb and similar websites, such as Homeaway. The bill would also authorize certain municipalities to impose a 3 percent transient accommodation tax

Background and Current Law

Under the current NJ law, the state imposes a 7% sales and use tax and a 5% hotel and motel occupancy fee on hotel room rentals. Additionally, the current law allows for certain municipalities to impose a local hotel occupancy tax of up to 6%. These rates and taxes do not apply to short-term rentals or occupancies that are booked via online marketplaces such as Airbnb. As a greater number of both business and leisure travelers turn to these platforms due to their affordability, flexibility, and stylish accommodations, lawmakers (not just in NJ) see a need to keep up.
 

Proposed Changes

Under A4048---introduced by Assemblywoman Annette Quijano (D-Union) and Assemblywoman Valerie Vainieri Huttle (D-Bergen)-- the State of NJ would change current transient accommodation fees and taxes that would allow the state to:

  • Impose a 7% sales and use tax;
  • Impose 5% transient accommodation fee on charges for short-term rentals rented through a transient marketplace;
  • Allow for certain towns to impose a 3% transient accommodation tax on certain charges for providing space for the accommodation of transient guests;
  • Limit the imposition of the taxes and fees to the taxable space for accommodation of a transient guest that is provided by a person engaged in the business of providing this space.

It’s important to understand that to be considered “engaged in business” as a transient accommodation, a person must be engaged in the activity of providing space for accommodation to the public as a business activity. This includes the placement of an advertisement or the listing of the space for accommodation on marketplace such as Airbnb or Homeaway). The only caveat is that the person (or landlord) must have cumulative gross receipts from charges (for providing space for accommodation to transient guests in this state) in excess of $1,000 during the preceding four calendar quarters. A quick search of Airbnb indicates that it’s not that hard to cumulate $1,000 in gross receipts from a short-term rental.

Interestingly, the bill allows the Director of the Division of Taxation to enter into an agreement with the owner or operator of a transient space marketplace for the purpose of collection and payment of the tax. Upon entering into such an agreement, the State may waive the responsibility of a person engaged in the business of providing space for accommodation to collect and pay the tax, placing the onus on the marketplace instead. The owner or operator of the transient space marketplace shall then agree to be liable for the collection and payment of the fee, which may seem more digestible to some landlords engaging in short-term rentals.

An increasing number of states will follow in the footsteps of states such as New Jersey and New York to best understand how to tax and regulate transient space marketplaces and many will look to the leadership and experience of NJ as it happens. DMGS will continue to monitor the progress of A4048 and other similar legislation as they moves through the NJ Assembly and other legislative bodies.
 

Transportation Trust Fund and Pension Ballot Question

The NJ Senate is heading back to it's first voting session of August, but missing from the voting schedule may be legislation seeking to renew the now lapsed Transportation Trust Fund (TTF) with a gas-tax hike as well as a resolution to put a pension-funding question on the ballot in November. Since the TTF shut down in early July, summer construction projects on roads, bridges, and rails in NJ are quickly becoming a safety issue for motorists. Democratic leaders in the NJ senate are vying to secure enough votes to override Governor Christie and put an end to the TTF shutdown. Read more...
 

Oil Transportation Safety

A bill currently moving through the a state Assembly committee would require train companies operating in New Jersey to publicize the routes of trains carrying volatile crude oil through the state, information currently kept secret. It would also require the owner or operator of a "high hazard train" to submit emergency response plans to the state Department of Environmental Protection, the state Office of Emergency Management, and relevant county offices. The bill has already been approved by the senate and is moving towards the house. Read more...

 

 

Pennsylvania

Expansion of Start-up Network in NEPA
Ben Franklin Technology Partners of Northeastern Pennsylvania is expanding its business incubator network to 14 members by adding four new partners that help new companies get off the ground. The new additions are Jump Start Incubator, Reading; Allan P. Kirby Enterprise Center at Wilkes University, Wilkes-Barre; The Stourbridge Incubator, Honesdale, Wayne County; and The TekRidge Center, Jessup, Lackawanna County. After losing about half its funding in 2009 during the recession when lawmakers made broad cuts to the state budget, Ben Franklin Technology Partners of Northeastern Pennsylvania is coming off its best fiscal year since then in terms of state support. Read More...

New Taxes in PA: Cigarettes and Digital Downloads
As part of the state budget that was just passed, digital downloads of music, videos, games, e-books, and apps will be now be charged the six percent state sales tax.

 

It's expected to bring in $47 million in just one year. Pennsylvania's cigarette tax, headed to $2.60 from $1.60, will push the price of a pack above $7, the largest single increase on the state's smokers since Pennsylvania first imposed a cigarette excise tax in 1935. The increase will make Pennsylvania's tax the 10th-highest in the nation. Read More...
 

 

 

 

DMGS Updates

Fall is coming and DMGS is looking for a few stellar interns in our Pittsburgh, Philadelphia, and Trenton offices. For more information, email Brett Goldman, DMGS Manager of Special Projects or visit our application here.

 

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