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New memo outlines White House review of independent agencies and guidance documents

The White House may soon exercise more oversight of independent agencies like the Federal Reserve Board and the Securities and Exchange Commission (SEC). An April 11 guidance memo published by the acting director of the Office of Management and Budget (OMB) establishes rules for compliance with the Congressional Review Act (CRA). It amends earlier OMB guidance for implementing the CRA published in 1999 to affirm that Office of Information and Regulatory Affairs (OIRA) review procedures apply to historically independent agencies. It also states that some guidance documents fall within the definition of rules subject to the CRA.
 
The CRA is a 1996 law that requires agencies to submit rules to Congress before they go into effect. The law allows Congress to pass a joint resolution of disapproval to block a rule. If the president signs the resolution, then the agency rule is void and the agency cannot make a similar rule in the future without explicit congressional authorization.
 
The guidance memo tells agencies not to publish any rules in the Federal Register or anywhere else until both OIRA determines whether the rule is major and the agency has complied with the CRA.
 
The CRA defines major rules as those that have or are likely to have the following features:
  • An annual effect on the economy of $100 million or more
  • A major increase in costs or prices for consumers, industries, government agencies, or geographic regions
  • Significant adverse effects on competition, employment, investment, productivity, innovation, or foreign trade competition
The memo affirms the broad scope of the CRA over administrative rules. Under Executive Order 12866, agencies have to submit any significant regulatory actions to OIRA for review. However, agencies do not submit all CRA-covered actions to OIRA. In addition to notice-and-comment rules, the new OMB memo says that agencies have to submit statements of policy and interpretive rules to OIRA and Congress. That includes guidance documents, which agencies often fail to submit for CRA review. The memo requires agencies to include a CRA compliance statement in the body of new rules, giving Congress notice that OIRA determined whether the rule was major.
 


In first quarter of 2019, legislatures act on donor disclosure policy

A little over three months into 2019, state legislatures nationwide have introduced 73 bills regarding donor disclosure policy in the states.
 
As of April 12, 34 states had seen such legislation introduced. Of these 73 bills, 34 were sponsored by Democrats and 21 by Republicans; the remainder were sponsored by bipartisan groups or committees. Of these 73 bills, 11 had been enacted, three had passed upper chambers, five had passed lower chambers, two had passed both chambers without having yet been signed into law, and three had died. The remainder were either in committee or awaiting a committee assignment.
 
Under federal law, nonprofits are generally only required to disclose to the public information about donors who contribute to fund campaign expenditures. State laws, however, may require more disclosure. For example, California and New York require registered nonprofits to disclose the donor data they report to the Internal Revenue Service that is not publicly released by the federal government. Other states, such as Montana and Washington, require nonprofits to publicly disclose their general supporters for engaging in speech about policy issues. In general, advocates for expanded donor disclosure provisions argue that such policies minimize the potential for fraud and establish public accountability. Meanwhile, opponents of such measures contend that disclosing to the public information about donors violates privacy rights and can inhibit charitable activity.
 


Denver “Right to Survive” Initiative faces $1.5 million in opposition

Initiated Ordinance 300 (I-300), named the “Right to Survive” Initiative by proponents, is on the ballot for voters in Denver, Colorado, on May 7. The citizen initiative has seen $1.6 million spent on campaigns, with $1.52 million in donations reported by “Together Denver – No on 300″ and $80,000 reported by “Yes On 300 Right To Survive.” Mail-in ballots will be sent to registered Denver voters beginning on April 15 containing this measure and other municipal races.
 
I-300 was designed to allow activities such as sleeping and sheltering oneself in public outdoor places—acts that are currently prohibited by Denver’s unauthorized camping ban, which was passed by the city council in 2012.
 
The city of Denver stated in an impact report that, if approved, I-300 would be the first initiative of its kind implemented in the nation. I-300 provides a list of rights that specifically concern homeless individuals, including the “right to rest and shelter oneself from the elements in a non-obstructive manner in outdoor public spaces.” While similar provisions under laws known as the “Homeless Bill of Rights” are codified in Illinois and Rhode Island, among other places, I-300 goes further by proposing to hold the city, county, law enforcement, or any other entity liable if that entity violates the rights listed in the initiative.
 
Initiative supporters have stated that the existing unauthorized camping law “targets Denver’s homeless, but fails to take into account that there are not enough shelter beds for everyone in need.” The “Yes on 300” campaign website states that I-300 would be a first step toward helping individuals experiencing homelessness sleep, find and hold down jobs, and find housing. Opponents have responded by saying that I-300 would threaten the quality of life for Denver citizens and prohibit officials from enforcing public safety laws. The “No on 300” website also states that the “Right to Survive” Initiative would fail to provide new services or address the causes of homelessness.
 
I-300 supporters have reported $81,514 in contributions to the “Yes on 300” campaign, with a top donation of $26,196 from Kayvan for Denver (former mayoral candidate Kayvan Khalatbari’s organization). The “No on 300” effort, led by Together Denver, has seen over $1.5 million in contributions, with top donors Downtown Denver Partnership and the National Association of Realtors each contributing $200,000.
 
Nick Brown, head of digital media for the “No on 300” campaign, said that “the initiative would allow camping in any public space in Denver indefinitely. That includes parks, sidewalks and other public areas.” He also stated that the campaign wants to “highlight that the initiative’s vague writing would make it harder for outreach workers to help people experiencing homelessness.” 
 
Proponents of the “Right to Survive” Initiative submitted over 9,000 petition signatures to the Denver Elections Division in October 2018 to place I-300 on the ballot. Previously, proponents backed a 2014 bill at the state level known as the “Right to Rest Act,” sponsored by state Reps. Joe Salazar (D) and Jovan Melton (D). The act contained similar provisions to I-300, including “the right to use and move freely in public spaces.” Though it was reintroduced in 2015, 2016, and 2017, the “Right to Rest Act” never went to a vote in the legislature.
 
Denver voters will have a chance to weigh in on the “Right to Survive” Initiative starting the week of April 15, when vote-by-mail ballots are set to go out. All ballots must be received by 7:00 pm on election day, May 7. Denver voters are also deciding Initiative 301—a first-of-its-kind initiative to decriminalize psilocybin mushrooms—and races for mayor, city auditor, city clerk, and all 13 city council seats.
 


Two candidates running in Honolulu City Council rematch

The city of Honolulu, Hawaii, is holding a special election for the District 4 seat of the city council on April 13. Trevor Ozawa and Tommy Waters are running in the special general election.
 
The special election was called after the results of the election on November 6, 2018, were invalidated by the Hawaii Supreme Court. The court found that mail-in votes were mishandled by election officials. Ozawa defeated Waters by a 22-vote margin in the November 2018 general election. The two candidates also faced off in 2014, with Ozawa winning by a 47-vote margin.
 
Honolulu is the largest city in Hawaii and the 53rd-largest city in the U.S. by population.
 


New members could make up majority of Buffalo school board following election

All nine seats on the Buffalo Public Schools school board in New York are up for general election on May 7, 2019. Three at-large seats and six by-district seats are on the ballot. At-large members are elected to five-year terms, and by-district members are elected to three-year terms. The filing deadline was April 9.
 
Five incumbents are seeking another term; they all hold by-district seats. All three at-large seats and the East Seat are open. Four incumbents are unopposed, and one incumbent faces a challenger. Louis Petrucci was appointed to the Park Seat in 2018 after previously serving in the district from 2007 to 2013. He faces Austin Harig, who previously ran for the seat in 2016.
 
The three open at-large seats drew eight candidates, and the East Seat drew two candidates. If Harig wins election to the Park Seat, five newcomers—a majority on the Board of Education—will be sworn in. If Petrucci wins, incumbents will retain a majority on the board.
 
During the district’s last election in 2016, the six by-district seats were on the ballot. Four incumbents sought re-election, and 1.5 candidates filed per seat compared to the 1.78 per seat in 2019. No race had more than two candidates on the ballot. Three incumbents and three newcomers were elected to the board. The 2014 election had the three at-large seats on the ballot, and two incumbents sought re-election. A total of 13 candidates, or 4.33 per seat, were on the ballot. One incumbent and two challengers were elected to the board.
 
Buffalo Public Schools served 34,293 students during the 2016-2017 school year.
 


April 16 special election to fill Connecticut House seat

A special election for the District 19 seat of the Connecticut House of Representatives is being held April 16. Candidates running for special elections in Connecticut are nominated through party conventions. The March 8 Republican nominating convention chose Robert Margolis as the party’s candidate, and the March 9 Democratic nominating convention chose Tammy Exum.
 
The seat became vacant after Democrat Derek Slap won the February 26 special election to fill the vacant District 5 seat in the Connecticut State Senate.
 
The April 16 election is the sixth state legislative special election the state has held in 2019. A seventh is scheduled for May 7.
 
Entering this election, the Connecticut House of Representatives has 89 Democrats, 60 Republicans, and two vacant seats. Connecticut has a Democratic trifecta. A state government trifecta exists when one political party simultaneously holds the governor’s office and both state legislative chambers.
 


Third federal judge strikes down citizenship question on 2020 U.S. Census

Judge George Jarrod Hazel of the United States District Court for the District of Maryland became the third federal judge to block a citizenship question on the 2020 U.S. Census on April 5, 2019. Hazel ruled in a consolidated case that the question, in his view, was unconstitutional and a violation of administrative law.
 
Commerce Secretary Wilbur Ross approved the addition of a citizenship question on the 2020 U.S. Census in March 2018. The question asks, “Is this person a citizen of the United States?”
 
Hazel claimed that the citizenship question violates the U.S. Constitution because it could hinder the government’s responsibility under the Enumeration Clause to count every person living in the United States. He also claimed that the Trump administration failed to follow proper administrative procedure when it added the citizenship question to the U.S. Census. He wrote, “The decision to add a citizenship question to the 2020 Census was arbitrary and capricious in violation of the [Administrative Procedure Act]” and “ran counter to the evidence before the agency.” Ross has stated that he added the citizenship question to the 2020 census at the request of the U.S. Department of Justice (DOJ) in order to improve enforcement of the Voting Rights Act.
 
Three federal judges had blocked the citizenship question from appearing on 2020 census forms as of April 2019. The United States Supreme Court will hear oral arguments on the question in Department of Commerce v. New York on April 23, 2019. A ruling is expected in June 2019.
 


Federal judge: Association health plan expansion challenged during Chevron two-step

A federal judge threw out a Trump administration rule designed to expand association health plans (AHP). The Department of Labor (DOL) rule allowed self-employed people to join associations that provided group health insurance plans like those offered by employers. United States District Court Judge John Bates’ 43-page opinion, issued on March 28th, said that the DOL rule used an unreasonable interpretation of federal law that he must set aside under the Administrative Procedure Act (APA) and the Chevron doctrine.
 
The Chevron doctrine is a two-step framework that compels federal judges to defer to agency interpretations of laws in some cases. When judges review agency interpretations of law under Chevron they must first determine whether the law was clear. If the law is ambiguous, then the judge will defer to the agency interpretation unless it is unreasonable. The APA requires judges to invalidate agency actions that are arbitrary, capricious, an abuse of discretion, or otherwise contrary to law.
 
In this case, Judge Bates held that the DOL rule was designed as an end-run around the Affordable Care Act (ACA) that ignored the language and purpose of both the ACA and the Employee Retirement Income Security Act of 1974 (ERISA).
 
Bates held that ERISA defined employer in an ambiguous way, but that the DOL rule’s definition was unreasonable. He wrote that the DOL rule failed at Chevron step two because its definition of employer stretched beyond the limits of ERISA in an unlawful way. He held that Congress did not intend for ERISA to regulate commercial healthcare insurance providers directly or to expand citizen access to healthcare benefits outside of employment relationships. He held that the DOL rule also contradicted the Affordable Care Act. He said Congress did not intend “that fifty-one distinct individuals employing no others could exempt themselves from the individual market’s requirements by loosely affiliating through a so-called ‘bona fide association’ without real employment ties.”
 


Arizona becomes the first state to recognize out-of-state occupational licenses

A new Arizona law directs state regulatory agencies to issue licenses or certifications for new residents who were already licensed in their previous state. The law allows people who move to Arizona to continue working in their career field without having to attend state-specific training. For example, licensed nurses in Texas would not have to go through a new process to become recertified as nurses in Arizona before moving and working in an Arizona hospital.
 
The law lists requirements for new residents seeking Arizona licenses to work in regulated fields. The law requires applicants to have a current certification in the same discipline in another state and have no record of disciplinary action or of the loss of a license in another state.
 
In his 2019 State of the State Address, Arizona Governor Doug Ducey argued in favor of the law saying, “100,000 people will move here this year. There’s a job available for every one of them. Lots of them are trained and certified in other states. Standing in their way of earning a living in Arizona, our own licensing boards, and their cronies […] And before those unelected boards feign outrage – let’s remember: workers don’t lose their skills simply because they move to Arizona.”
 
Opponents of the law, like the National Board of Certified Counselors, argued, “Although the intent is to make it easier to work in Arizona, such legislation potentially exposes the public to mental health providers who have not met the minimum qualifications to practice in the state.”
 


Second electoral do-over for Georgia House seat results in conclusive victor

In Georgia and Florida, state legislative special elections were held on Tuesday.
 
A special election was held for District 28 in the Georgia House of Representatives. This was the third election for the seat in the past year. The regularly scheduled primary on May 22, 2018, and a new primary on December 4, 2018, were both deemed inconclusive due to ballot errors so a judge ruled that a new election should be held. Since no Democratic candidate filed in the original election, both the December 2018 do-over and the April 9 race consisted of only Republican primaries to determine the seat’s winner. Chris Erwin defeated the former incumbent, Dan Gasaway, with 75.5 percent of the unofficial election night vote to win the seat.
 
Special primaries were also held for the District 7 and District 38 seats in the Florida House of Representatives. The general election is on June 18, 2019. Ryan Terrell (D) and Jason Shoaf (R) advanced to the general election in District 7; Terrell ran uncontested and Shoaf defeated three challengers with 48.9 percent of the unofficial election night vote. Kelly Smith (D) and Randy Maggard (R) advanced to the general election in District 38; Smith also ran unopposed, and Maggard defeated David McCallister to win the Republican nomination. A special primary was also originally scheduled for the District 97 seat, but it was canceled after Dan Daley (D) was the only candidate to file and won the seat by default.
 
The District 7 seat was vacated by Halsey Beshears (R), who resigned on January 11, 2019, to become the Secretary of the Department of Business and Professional Regulation. The District 38 seat was vacated after Daniel Burgess (R) was appointed as the Executive Director of the Department of Veterans’ Affairs on January 24, 2019. The District 97 seat became vacant when Jared Moskowitz (D) resigned in January 2019 to become the Director of the Florida Division of Emergency Management.
 
Entering the election, the Georgia House of Representatives had 75 Democrats, 104 Republicans, and one vacancy. A majority in the chamber requires 91 seats. The Florida House of Representatives had 46 Democrats, 71 Republicans, and three vacancies. A majority in the chamber requires 61 seats.
 
Georgia and Florida both have Republican trifectas, which exist when one political party simultaneously holds the governor’s office and both state legislative chambers.