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Group of 17 states brings administrative law challenge against new Endangered Species Act rules

On September 25, a group of 17 states, Washington, D.C., and New York City, joined together to sue the Trump administration in an effort to block three new rules that changed how federal agencies enforce the Endangered Species Act (ESA). The lawsuit argues that the U.S. Fish and Wildlife Service and National Marine Fisheries Service failed the Administrative Procedure Act’s (APA) arbitrary-or-capricious test when they issued the rules in August.
 
The arbitrary-or-capricious test is a legal standard of review judges use to assess actions taken by administrative agencies. The test came from a provision of the 1946 Administrative Procedure Act, which instructs courts reviewing agency actions to invalidate any that they find to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Judges use the test most often to assess the facts underlying an agency rulemaking.
 
According to the Trump administration, the rule changes related to the ESA reduce the regulatory burden and increase agency transparency. Opponents of the rules argue that the changes limit the ability of agencies to respond to perceived problems.
 
The states filed the lawsuit in the United States District Court for the Northern District of California. The 17 states that joined the lawsuit are California, Massachusetts, Maryland, Colorado, Connecticut, Illinois, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington.
 


School board elections happening amidst uncertainty in Houston, Texas

Four out of nine seats on the Houston Independent School District (HISD) board of education are up for general election on November 5, 2019. Heading into the election, the HISD school board faces the possibility of being replaced by a state-appointed board of managers. If the state appoints a board of managers, elected school board members would not have any power until the elected board was reinstated, although they could participate as non-voting representatives.
 
The state’s commissioner of education, Mike Morath, could decide to replace the HISD school board for either of two reasons: either as a result of a Texas Education Agency (TEA) investigation into the board’s governance or as a result of poor academic performance ratings at a high school in the district.
 
TEA Special Investigations Unit Director Jason Hewitt recommended in August 2019 that the state appoint a board of managers for the district. He cited the elected board’s “inability to appropriately govern, inability to operate within the scope of their authority, circumventing the authority of the superintendent, and inability to ensure proper contract procurement laws are followed.” HISD lawyers filed a lawsuit against the TEA on August 16 which claimed that school board members’ rights were violated and that allegations were not fully investigated. The lawsuit also said that a state-appointed board would violate the Civil Rights Act, since a majority of voters in the district are people of color.
 
According to preliminary ratings for the 2018-2019 school year, one HISD high school received a failing grade for the seventh year in a row. Texas House Bill 1842 requires that the commissioner of education either close a school that receives more than five consecutive failing grades or replace the district’s board of education. HISD received a waiver from state ratings for the 2017-2018 school year due to Hurricane Harvey. School board members voted to appeal the failing grade on September 5, which could delay a potential state takeover of the board.
 
As of the 2018-2019 school year, HISD was the largest school district in Texas and the seventh-largest school district in the United States, serving 209,772 students in 280 schools with a budget of $2.04 billion.
 
The last day to register to vote in this election is October 7. Early voting will run October 21 through November 1. The general election will be held November 5.
 


At-large results certified in Nashville council runoff

Four out of five at-large seats on the Nashville Metro Council were on the ballot in a nonpartisan runoff election held on September 12. Eight of the 15 general election candidates had advanced to the runoff; after the vote totals were certified, the four seats were ultimately won by three incumbents and one challenger.
 
Incumbents Burkley Allen, Sharon Hurt, and Steve Glover were re-elected to new four-year terms. Hurt received 15.3%, Allen received 13.2%, and Glover received 13.1% of the vote. Challenger Zulfat Suara was also elected to the council with 13.0% of the vote. The four runoff candidates who lost were incumbent Fabian Bedne (11.3%) and challengers Sheri Weiner (12.6%), Howard Jones (11.5%), and Gary Moore (9.6%). The fifth at-large seat was previously won in the August general election by incumbent Bob Mendes.
 
Races for city council seats in Districts 2, 7, 13, 16, 21, 23, 26, and 30 also advanced to a runoff on September 12. The Nashville Metro Council has 35 district seats and five at-large seats. It also includes Vice Mayor Jim Shulman, who won re-election in the August general election with 80.5% of the vote.
 
Nashville is the largest city in Tennessee and the 25th-largest city in the U.S. by population.
 


Fifth Circuit pauses SEC action while it resolves appointment power question

On September 24, a panel of judges on the Fifth Circuit Court of Appeals ordered the Securities and Exchange Commission (SEC) to delay enforcement proceedings against an accountant until after the court resolves a pending legal challenge. The accountant, Michelle Cochran, argues that since the president cannot fire the SEC Administrative Law Judge (ALJ) that will oversee her agency hearing, the ALJ has unconstitutional protections. The Fifth Circuit will now decide whether SEC ALJs operate in line with the U.S. Constitution.
 
An ALJ is an official who presides over federal administrative hearings. ALJs serve as both the judge and the jury in an administrative hearing. The Administrative Procedure Act (APA) requires that administrative law judges preside over hearings during formal adjudication proceedings, but they may also preside over hearings during informal adjudication. Adjudication proceedings aim to resolve disputes between either agencies and private parties or between two private parties.
 
According to a summary provided by her lawyers, Cochran’s case started in 2016, when she was charged with violating accounting standards. An SEC ALJ ruled against her in 2017, fined her, and banned her from practicing as an accountant for five years. Soon after, the U.S. Supreme Court decided _Lucia v. SEC_. In that case, the court ruled that SEC ALJs were officers of the United States and had to be appointed by the president according to the procedures in the U.S. Constitution.
 
Since the ALJ who made the 2017 ruling against Cochran was not appointed by the president, the SEC decided that a new, properly appointed, ALJ had to re-hear her case. Now, Cochran is challenging the civil service removal protections that keep presidents from firing SEC ALJs once they have been appointed. She argues that the ALJs enjoy layers of removal protections similar to those the U.S. Supreme Court found unconstitutional in the 2013 case _Free Enterprise Fund v. PCAOB_.
 
Cochran is represented by the New Civil Liberties Alliance (NCLA), a public interest law firm in Washington, D.C. The judges on the Fifth Circuit panel were Reagan-appointee Edith Jones, Obama-appointee Stephen Higginson, and Trump-appointee Andrew Oldham.
 


Public-sector unions contributed $159.8 million to federal, state, and local candidates in 2018

In 2018, public-sector unions contributed $159.8 million to candidates for federal, state, or local office, according to resources available through campaign finance reporting requirements at both the federal and state levels.
 
The five states in which political candidates received the most money in contributions from public-sector unions were:
  • California, where unions contributed $74.1 million, 46.4 percent of the nationwide total.
  • Illinois, where unions contributed $14.2 million, 8.9 percent of the nationwide total.
  • Oregon, where unions contributed $10.6 million, 6.6 percent of the nationwide total.
  • Minnesota, where unions contributed $10.4 million, 6.5 percent of the nationwide total.
  • New York, where unions contributed $9.8, 6.1 percent of the nationwide total.
 
Combined contributions in these five states totaled $119.0 million, about 75 percent of the nationwide total. Meanwhile, contributions in the remaining 45 states totaled $40.7 million—about 25 percent of the nationwide total.
 
These totals are based on resources gathered by the National Institute on Money in Politics, and reflect contributions by public-sector unions to political candidates. These figures do not account for unions’ satellite spending activities.
 


IRS proposes donor disclosure exemptions for select nonprofit groups

On September 10, the Internal Revenue Service (IRS) and the Department of the Treasury published a proposed regulation that would exempt some nonprofit groups from existing donor disclosure requirements. In July, a federal judge struck down a similar rule issued in 2018, finding that federal agencies had failed to follow proper procedures in enacting the rule change.

What would change under the proposed regulation?
Should the proposed regulation be enacted, existing donor disclosure requirements would apply only to groups organized under Sections 501(c)(3) and 527 of the Internal Revenue Code. Other 501(c) nonprofits, such as labor unions, trade associations, and social welfare groups, would not be required to disclose the names of their donors to the federal government. Under both existing regulations and the proposed rule change, donor names disclosed to federal agencies are not publicly released.

What brought us here?
On July 16, 2018, the IRS issued Revenue Procedure 2018-38, a rule change substantively similar to that issued earlier this month. On July 30, Judge Brian Morris, appointed to the U.S. District Court for the District of Montana by President Barack Obama (D), struck down the procedure, finding that the IRS had failed to comply with the public notice-and-comment process required under the Administrative Procedure Act. Morris did not comment on the merits of the rule change.

What are the reactions?

  • Ralph Graybill, chief legal counsel for the Montana governor’s office, which was a plaintiff in the original challenge to the 2018 rule, said, “The State of Montana looks forward to giving the IRS a better picture of the devastating impacts its rules could have on state tax agencies as well as efforts to prevent foreign influence in our elections. We appreciate that the agency reversed from its prior course that excluded public comment.”
  • In announcing the original rule change in 2018, Steve Mnuchin, Secretary of the Treasury, said, “Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area.”

What comes next?
Written and electronic comments must be received by December 9. Any request for a public hearing must also be made by that time.

What we’re reading

The big picture

Number of relevant bills by state: We’re currently tracking 72 pieces of legislation dealing with donor disclosure. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we’re tracking.

Disclosure Digest map September 30, 2019.png

Number of relevant bills by current legislative status

Disclosure Digest status chart September 30, 2019.png

Number of relevant bills by partisan status of sponsor(s)

Disclosure Digest partisan chart September 30, 2019.png

Recent legislative actions

Below is a complete list of legislative actions taken on relevant bills in the past week. Bills are listed in alphabetical order, first by state then by bill number. Know of any legislation we’re missing? Please email us so we can include it on our tracking list.

  • California AB864: This bill would expand disclosure requirements for certain kinds of political advertisements made by independent expenditure groups and other entities.
    • Senate amended and approved September 11; Assembly approved September 12. Submitted to governor September 24.
  • New Hampshire SB156: This bill would require that political contributions made by limited liability companies be allocated to individual members in order to determine whether individuals have exceeded contribution limits.
    • Veto sustained September 19.


Ballotpedia releases research on public-sector union political spending

Our research project analyzing public-sector union membership, finances, and political spending is now complete. In last week’s edition, we shared our key findings on union finances. This week, let’s turn our attention to political spending.

Methodology
Campaign finance reporting requirements at both the federal and state levels enable us to report comprehensively on political spending by public-sector unions. Using resources compiled by the National Institute on Money in Politics, we collected data on all contributions made by public-sector unions to political candidates in 2018.

Summary of findings
Public-sector unions contributed $159.8 million to candidates for federal, state, or local office in 2018. Note that this figure does not account for unions’ satellite spending activities. The five states in which political candidates received the most money in contributions from public-sector unions are:

  • California, where unions contributed $74.1 million, 46.4 percent of the nationwide total.
  • Illinois, where unions contributed $14.2 million, 8.9 percent of the nationwide total.
  • Oregon, where unions contributed $10.6 million, 6.6 percent of the nationwide total.
  • Minnesota, where unions contributed $10.4 million, 6.5 percent of the nationwide total.
  • New York, where unions contributed $9.8, 6.1 percent of the nationwide total.

Combined contributions in these five states totaled $119.0 million, about 75 percent of the nationwide total. Meanwhile, contributions in the remaining 45 states totaled $40.7 million—about 25 percent of the nationwide total.

For a complete breakdown of public-sector union political spending data, including links to state-specific data sets, see this article.

The big picture

Number of relevant bills by state

We are currently tracking 102 pieces of legislation dealing with public-sector employee union policy. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we’re tracking.

Union Station map September 27, 2019.png

Number of relevant bills by current legislative status

Union Station status chart September 27, 2019.png

Number of relevant bills by partisan status of sponsor(s)

Union Station partisan chart September 27, 2019.png

Recent legislative actions

Below is a complete list of legislative actions taken since our last issue. Bills are listed in alphabetical order, first by state then by bill number.

  • California AB314: This bill would require employers to grant employees paid time for certain union activities.
    • Presented to the governor Sept. 24.
  • New Hampshire HB363: This bill would establish the state legislature as a public employer under the state’s public-employer labor relations laws.
    • Legislative Administration Committee work session held Sept. 26.


Early voting starts in Louisiana two weeks ahead of gubernatorial primary

Early voting for Louisiana’s elections, including the gubernatorial and state legislative top-two primaries, begins Saturday, September 28 and lasts one week, ending on October 5. A candidate can win the election outright by receiving more than 50 percent of the vote in the October 12 primary. Otherwise, a general election for the top two finishers will be held November 16.
 
In Louisiana’s gubernatorial primary, the top three candidates are incumbent John Bel Edwards (D), U.S. Rep. Ralph Abraham (R), and businessman Eddie Rispone (R). Two polls from late September have shown Edwards with 46 to 47 percent support and Abraham and Rispone 2 to 3 percentage points apart, within margins of error, for second place.
 
Edwards says that Louisiana went from having a budget deficit to a budget surplus during his tenure and that he increased funding for education and expanded Medicaid in the state. Abraham and Rispone say that Louisiana’s economy ranks last in the nation. Both say they would increase jobs and lower taxes. Abraham has campaigned on his record in the U.S. House, referring to himself as a conservative Christian leader. Rispone describes himself as a conservative outsider and job creator, highlighting his background as a businessman
 
Edwards is the only Democratic governor in the Deep South and the only Democrat holding statewide office in Louisiana. Both the Democratic Governors Association (DGA) and the Republican Governors Association (RGA) are targeting the race. The DGA says Edwards is popular and in a strong position for re-election. The RGA says President Donald Trump’s (R) 20-point victory in the state in 2016 indicates a competitive race.
 
The gubernatorial election coincides with elections for the state Senate and state House, meaning that all three trifecta components will be on the ballot. Neither party will be able to form a trifecta without winning the gubernatorial election. Democrats would need to retain the gubernatorial seat and win majorities in both chambers of the state legislature while Republicans would need to maintain their legislative majorities and pick up the governor’s mansion.
 
Additional reading:


DNC announces fourth presidential primary debate in October will be held on single day, 12 candidates expected to qualify

The Democratic National Committee announced Friday that the October presidential primary debate will take place on one day, rather than two days as was expected. It will be held in Westerville, Ohio, with CNN and The New York Times as hosts. Erin Burnett, Anderson Cooper, and Marc Lacey will moderate the debate.
 
Tulsi Gabbard reached 2 percent support in a New Hampshire poll released this week, giving her the final poll necessary to qualify and bringing the total number of candidates expected on stage to 12.
 
The candidates who had already qualified are Joe Biden, Cory Booker, Pete Buttigieg, Julián Castro, Kamala Harris, Amy Klobuchar, Beto O’Rourke, Bernie Sanders, Tom Steyer, Elizabeth Warren, and Andrew Yang.
 
The other seven Democratic candidates have until Oct. 1 to reaching the polling and fundraising thresholds.


Federal Register weekly update; 2019 year-to-date page total leads 2018 by more than 2,000 pages

The Federal Register is a daily journal of federal government activity that includes presidential documents, proposed and final rules, and public notices. It is a common measure of an administration’s regulatory activity.
 
During the week of September 23 to September 27, the number of pages in the Federal Register increased by 1,730 pages, bringing the year-to-date total to 51,364 pages. The week’s Federal Register featured a total of 543 documents, including 421 notices, two presidential documents, 47 proposed rules, and 73 final rules.
 
Three proposed rules and three final rules were deemed significant under E.O. 12866—meaning that they may have large impacts on the economy, environment, public health, or state or local governments. Significant actions may also conflict with presidential priorities or other agency rules.
 
During the same week in 2018, the number of pages in the Federal Register increased by 1,064 pages for a year-to-date total of 49,264 pages. As of September 27, the 2019 total led the 2018 total by 2,100 pages.
 
The Trump administration has added an average of 1,317 pages to the Federal Register each week in 2019 as of September 27. Over the course of 2018, the Trump administration added an average of 1,301 pages to the Federal Register each week. During the Obama administration, the Federal Register increased by an average of 1,658 pages per week.
 
According to government data, the Federal Register hit an all-time high of 95,894 pages in 2016.
 
Ballotpedia maintains page counts and other information about the Federal Register as part of its Administrative State Project. The project is a neutral, nonpartisan encyclopedic resource that defines and analyzes the administrative state, including its philosophical origins, legal and judicial precedents, and scholarly examinations of its consequences. The project also monitors and reports on measures of federal government activity.