Congress and the States Start to Convene their 2016 Sessions
Thursday, January 7, 2016
The U.S. House convened this week and the Senate comes back to town on January 11. Forty-seven states and the District of Columbia will meet in 2016. Only Montana, Nevada, North Dakota and Texas are not in session this year. The District and 38 states convene in January, and another five states come back in the first week of February. Louisiana and Minnesota start in March and North Carolina starts in April. This is the second year of a two-year session for all states except New Jersey and Virginia.
SFAA’s Government Affairs Advisory Committee (GAAC) has set priorities for the surety and fidelity legislation that SFAA and AIA will seek to have introduced and enacted this year, and the GAAC also reaffirmed the policy positions that we will take to address legislation introduced by others in the 2016 sessions. SFAA members can access a copy of our policy positions, a list of affirmative priorities and a list of projected 2016 state legislation impacting surety and fidelity on our website at www.surety.org.
2016 is a Presidential election year, when the White House, 34 U.S. Senate seats and the entire House, and virtually all state legislators are up for re-election, which means shorter sessions to accommodate the political party conventions in July and re-election campaigns in general.
Fiscal issues likely will be high on some state agendas in 2016. Several states experienced speed bumps going into fiscal 2016 and some called special sessions in the fall to address budget shortfalls. With revenues growing slowly, states have balanced their budgets by maintaining spending and forgoing new initiatives, but facing underfunded state pensions and dwindling federal assistance, among other issues, some states may need to raise taxes in 2016 to stay afloat. More states will consider increasing the gas tax in 2016 to fund highway construction and repairs, particularly with the decrease in the price of oil. Tax credits and cuts enacted in prior sessions will be reconsidered if they did not stimulate the state economy or create jobs. Much of the legislative time could be consumed with fiscal issues in states with budget issues.
Politics rather than policy will dominate this session of Congress. The big issues on the agenda, such as a comprehensive overview of the tax laws, won’t get done this year, and as the session progresses, Congress will be more inclined to postpone legislation until after the November elections. Both parties will parties will tee-up issues for their constituency. The first item on the agenda for the House this week was a vote to repeal Obamacare and defund Planned Parenthood. A Republican Congress and a Democratic White House, however, managed to enact a $1.15 trillion budget, a long term extension of the highway and $680 billion tax extender package in 2015. There certainly will be some “smaller” issues that can be moved. In addition, the Republican leadership intends that the annual appropriations bills for the federal agencies will be considered individually this year, rather than in an omnibus bill before Congress adjourns in September for the elections.
We expect that public private partnerships (P3s) will again be a key legislative issue. SFAA already has seen draft legislation from Missouri, Oklahoma and Washington and has recommended amendments to require bonding of any construction in a P3. SFAA is working with the local AGC in Connecticut on a bonding amendment for legislation that will be considered this year to continue or expand the expiring authority for a limited number of P3 projects. California also has a P3 law that expires this year. A P3 bill was introduced late in the 2015 in Michigan and it will be considered this year. Many states considered P3 bills last year that ultimately did not pass, but some of these bills carryover and other may surface again.
The U.S. Senate is almost ready to act on legislation to realign the federal government’s inventory of buildings. A bill that allows and targets public buildings for sale and disposal was marked up in committee last year. SFAA has been working on a second bill, soon to be introduced, that would deal with oversight and management of federal property under which some use of P3s is contemplated. Staff has told us that the bill will require best practices to be developed for P3s, and we are seeking an amendment that would provide that any construction in connection with such projects must be bonded.
View PDF version