The 114th Congress: 2015 Year-End Wrap & 2016 Legislative

The 114th Congress: 2015 Year-End Wrap & 2016 Legislative Forecast @NECAGovtAffairs

114th Congress: Productivity Reigns? Number of Public Bills and Joint Resolutions Enacted Into Law, by Session 111 th 114 th Congress (2009-2015) First Session Second Session 100 Laws: The 114 th Congress had the most productive first session of the last three Congresses, enacting 100 laws as of December 17, 2015 December 18, 2015 Christine Yan!

Bipartisanship Returns! Set bipartisan budget levels for fiscal 2016 and fiscal 2017 Passed a permanent fix to the Medicare Sustainable Growth Rate Replaced the No Child Left Behind law with the Every Student Succeeds Act Passed fiscal year appropriations before leaving for the December recess Suspended the debt limit until March 2017 Passed a law that allowed the administration to strike a nuclear agreement with Iran Passed "Fast-Track" Trade Authorization and Trade Adjustment Authority Passed a PATRIOT Act replacement, the USA FREEDOM Act Replenished the Highway Trust Fund and funded surface transportation for five years Passed a bill to improve the energy efficiency in federal and commercial buildings Passed extensions to many tax provisions and permanent fixes to others Passed changes to ACA's small employer mandate Passed a bill to combat human trafficking

Jan 2014 Sep 2014 Dec 2014 Mar 2015 Sep 2015 Nov 2015 Dec2016 Appropriations Timeline of Key Recent Federal Actions on Appropriations Consolidated Appropriations Act, 2014: Following a temporary government shutdown in December 2013, an omnibus spending package passed funding for the government through the end of September of 2014 Continuing Resolution, FY2015: A short-term continuing resolution passed, funding the government at FY2014 levels through December 11, 2014. The law pushed appropriations deadlines into the lame duck session. Consolidated and Further Continuing Appropriations Act of 2015: Just hours before another potential shutdown, Congress passed an appropriations package funding almost all appropriations categories through FY2015, with a continuing resolution until March for DHS. Department of Homeland Security Appropriations Act: After attempting and failing to use DHS funding to leverage repeal of executive actions on immigration, Congress passed a bipartisan bill to fund the Department of Homeland Security through the end of FY2015. Continuing Resolution, FY2016: A clean short-term continuing resolution passed, funding the government at FY2015 levels through December 11, 2015, without language defunding Planned Parenthood. Speaker Boehner resigned to make the possibility of a government shutdown less likely. Bipartisan Budget Act of 2015: A compromise budget deal was signed into law, increasing both defense and nondefense spending while cutting certain areas of entitlement spending. Consolidated and Further Continuing Appropriations Act of 2016: After days of negotiation, lawmakers produce an omnibus appropriations bill that also addresses a bipartisan package of expiring tax credits known as tax extenders. Nearly all controversial poison pill riders were removed from the final deal, leading to swift passage in the final days of the legislative year. Potential Actions in 114 th Congress A final continuing resolution that was passed to fund the government through December 16; Congress pass an omnibus appropriations package that will fund the government through September 30, 2016. The Consolidated and Further Continuing Appropriations Act of 2016 funds the federal government through 9/30/16, all federal construction programs, and also enacts several key provisions, including: A two-year delay of the Cadillac tax on Permanently extends R&D Tax Credit Permanently extends Section 179 expensing deduction Five year extension of tax breaks for wind and solar energy

Taxibus Excludes Many Controversial Riders Key Provisions Included: Postpone Cadillac health insurance tax for two years Key Provisions Not Included: Restrictions on Syrian refugee resettlement 179 $ Postpone Medical Device Tax for two years Postpone Health Insurance Tax (HIT) for one year Permanently extends R&D Tax Credit Permanently extends Section 179 expensing deduction Ends the oil export ban Five year extension of tax breaks for wind and solar energy Permanently extends expansions of Child Tax Credit, EITC, and American Opportunity Tax Credit Permanently extends the state and local sales tax deduction Defunding Planned Parenthood Ending the ban on government research into gun violence New funding for ACA "Risk Corridor" for insurance companies on exchanges Revisions to financial regulations in Dodd- Frank Delay of Labor Department "fiduciary duty" rule for retirement investment advisors Reversion of Federal Reserve dividend reduction (from highway bill)

Tax Extenders Detailed 10-Year Costs of Major Provisions Dollars in Billions Bonus Deprecia:on $280.7 Tax Credit for Research and Experimenta:on Expenses Excep:ons under Subpart F for Ac:ve Financing Income Increase in Expensing and Expansion of Defini:on of Sec:on 179 Property $78.0 $77.1 $181.6 15-Year Straight-Line Deprecia:on Provisions Elec:on to Accelerate AMT Credits in Lieu of Addi:onal First-Year Deprecia:on Look-Through Treatment of Payments between Related Controlled Foreign Work Opportunity Tax Credit 100% Exclusion for Qualified Small Business Stock Credit for Certain Expenditures for Maintaining Railroad Tracks Deduc:ons for Domes:c Produc:on Ac:vi:es in Puerto Rico $28.4 $24.5 $21.8 $16.4 $9.2 $2.1 $2.1

2012 Feb 2014 Sep 2014 Jan 2015 Jul 2015 Nov 2015 Tax Reform Timeline of Key Recent Federal Actions on Immigration American Taxpayer Relief Act of 2012: A law which made a series of Bush administration tax cuts permanent, but increased tax rates on dividends, estate taxes, and payroll taxes; the bill also extended certain corporate tax breaks and certain tax breaks for lower-income families. Tax Reform Act of 2014: A comprehensive draft proposal for tax reform which was released by then-house Ways and Means Committee Chair, Rep. Dave Camp (R-MI); the bill would have lowered corporate and individual tax rates and simplified the tax code, but faced wide opposition and was only ceremonially put to the floor at the end of 2014. Treasury Actions on Inversion: Treasury Secretary Jack Lew put forward a series of measures designed to reduce benefits of tax inversions, including blocking inverted companies from transferring assets to parent companies and accessing foreign earnings. Senate Finance Committee Tax Working Groups: The Senate Finance committee created five tax reform working groups on different issue areas to create proposals for tax reform in the 114th Congress. These reports were presented in July 2015; however, there was no consensus or clear plan for reforms. Portman-Schumer Plan: Sens. Portman (R-OH) and Schumer (D-NY) proposed a framework to tax all US corporate profits abroad regardless of repatriation, but at a significantly lower rate. The plan is supported by Rep. Paul Ryan (R-WI), but opposed by Senate majority leader Mitch McConnell (R-KY), who prefers comprehensive tax reform. Further Treasury Action: The Treasury Department announced additional rules intended to discourage tax inversion. The pharmaceutical company Pfizer announced plans to merge with Allergan, which would be the largest tax inversion so far. Potential Actions in 114 th Congress Comprehensive tax reform is unlikely in a short window; the most likely scenario for reform is likely to be another repatriation holiday or other international tax reforms Though there were originally proposals to use FY2016 budgetary reconciliation authority to address comprehensive tax reform, the joint budget resolution tied reconciliation language to repeal of the Affordable Care Act Proposals for moderate tax reform tied to renewal and funding of the Highway Trust Fund will make their way through Congress; any other plans for tax reform will likely be low priority until after the 2017 elections

2011 Feb 2013 Oct 16, 2013 Feb 2015 Mar 2015 Nov 2015 Debt Ceiling Timeline of Key Recent Federal Actions on the Debt Ceiling Budget Control Act of 2011: The BCA was designed to avoid a potential shutdown due to a failure to raise the debt limit in 2011; the act delegated authority to a supercommittee to find an agreement on deficit reduction; however, no agreement was met, and so automatic penalty sequestration cuts were put into effect. No Budget, No Pay Act of 2013: A bill which temporarily suspended the debt limit until May 28, 2013 and put Congressional pay on hold until a budget resolution could be passed. Continuing Appropriations Act, 2014: A continuing resolution passed in fiscal year 2014, which funded the government and suspended the debt limit until February 2015 to give lawmakers more time to negotiate a compromise proposal. Temporary Debt Limit Extension Act: Both houses of Congress passed a debt ceiling extension, suspending the ceiling until March 15, 2015. Debt Limit Reinstated: The suspension of the debt ceiling was lifted in March; the Treasury took extraordinary measures to allow the government to pay its bills through November. Bipartisan Budget Act of 2015: In a budget compromise between Congressional leaders and the White House, the debt ceiling was suspended until March 2017, when the limit will be reset to the level of debt on the books at the time. Potential Actions in 114 th Congress None; the debt ceiling is suspended until March 15, 2017. The level that the debt has risen to at that point will become the new debt limit.

Affordable Care Act Timeline of Key Recent Federal Actions on the Affordable Care Act 2012 2013 May 2015 June 2015 Oct 2015 Dec 2015 NFIB v. Sebelius: The Supreme Court decided that penalties imposed enforcing the ACA s individual mandate are a constitutional application of Congress s taxing and spending power; however, the law s provision stripping Medicaid funding from states if they did not opt-in to the Medicaid expansion was ruled unconstitutionally coercive. Continuing to Implement the ACA in a Careful, Thoughtful Manner : The Treasury Department issued a memo delaying the employer mandate by one year, leading to criticism from Congress and an eventual lawsuit by the House of Representatives. FY2016 Budget Resolution: The joint budget resolution passed by both houses of Congress sets forth reconciliation provisions which will give the Senate the ability to write appropriations legislation repealing the ACA via a simple majority vote. King v. Burwell Decision: The Supreme Court ruled to uphold federal subsidies for all eligible Americans under the ACA. The decision allowed the administration to move forward with full implementation and administration of the ACA without the threat of legal challenges to the basic structure or operation of the law. Bipartisan Budget Act of 2015: The budget compromise that was struck in Congress repeals the automatic-enrollment provision of the ACA, which forces large employers with 200 or more employees to automatically enroll new employees in employer-sponsored healthcare plans Restoring Americans Healthcare Freedom Reconciliation Act of 2015: The Senate voted 52-47 on the bill, but included an amendment that ends the Cadillac Tax. Potential Actions in 114 th Congress While Congress might have dealt with the issue of the Cadillac Tax, the reality is this is just for the short-term. A full repeal is still necessary to bring NECA contractors and their Health and Welfare Trust Funds the predictability and fiscal stability they need for the long-term.

Transportation Infrastructure Timeline of Key Recent Federal Actions on the Highway Trust Fund July 2014 May 2015 July 2015 Oct 2015 Nov 2015 Highway and Transportation Funding Act of 2014: A $10.8 billion law keeping the fund solvent until May 2015, as a temporary patch prior to the August recess and projected insolvency. Highway and Transportation Funding Act of 2015: A further two month extension of the Highway Trust Fund is passed by Congress; Republicans, including House Majority Leader Kevin McCarthy (R-CA) and House Ways and Means Chairman Paul Ryan (R-WI) suggest paying for a more permanent extension of the fund by generating revenue through tax reform. Surface Transportation and Veterans Health Care Choice Improvement Act of 2015: On the brink of insolvency, the House passes a short term 3- month extension to allow for more time to negotiate a 6-year bill. The bill passed in the Senate as well, right after the Senate passed the DRIVE Act, which reauthorizes highway spending for 6 years but only plans 3 years of funding. The President signs the 3-month patch. Surface Transportation Extension Act of 2015: Congress approves a three-week patch to prevent a shutdown of the federal transportation funding. Surface Transportation Extension Act of 2015, Part II: Congress approves two-week patch before the Thanksgiving recess to avoid a shutdown in federal transportation funding. Potential Actions in 114 th Congress None The FAST Act funds transportation investments for five years and renews the Export-Import Bank through September 2019. Senator Chuck Schumer (D- NY) has suggested using international tax reform to fund new infrastructure spending in 2016, but this is unlikely to pass Congress during the election year. Dec 2015 Fixing America s Surface Transportation (FAST) Act: House and Senate negotiators agree on a 5-year, $305 billion highway bill, the longest term highway bill in a decade. This piece of legislation revives the Export-Import Bank while keeping the gas-tax stagnant at 18.4 cents per gallon.

Agreement on $300 Billion Highway Bill Highlights From New 5-Year Highway Trust Fund Bill Boosts highway spending by 15% and transit spending by 18% over its duration Will create a separate budget for Amtrak s Northeast Corridor apart from the rest of the nationwide system $200 million made available for commuter railroads to install positive train control technology to prevent collisions and derailments Liability cap for passenger rail incidents raised from $200 million to $295 million Will create a grant program guaranteeing funds for large freight projects Provides $1 billion for vehicle safety programs NECA s Take: The agreement is a welcome change to the short-term patches put in place by Congress since 2008 as a result of difficult partisan disagreements surrounding the Highway Trust Fund Congress chose to raise revenue without raising the gas-tax by tapping a multitude of other sources including the sale of oil from the nation s emergency stockpile and money from a Federal Reserve surplus account The May 2015 deadly derailment of an Amtrak train in Philadelphia is said to have influenced reforms surrounding railroad safety

Agreement on Energy Bill Highlights From New House-Passed Energy Bill H.R. 8 amends current law and authorizes activities, to be administered primarily by the Department of Energy (DOE), in an effort to advance energy infrastructure development, modernization, and protection; enhance domestic energy security; and promote energy efficiency and government accountability: Expedited Interstate Energy Project Review Requires Federal Energy Regulatory Commission (FERC) to expedite review process for federal energy related applications, such as certain pipeline applications. Natural Gas Export Authorization Streamlines the regulatory process for authorizing liquefied natural gas (LNG) exports by establishing a 30-day deadline for DOE to act on applications at the conclusion of the review required by the National Environmental Policy Act. Rights-of-Ways (ROWs) for Natural Gas Pipelines Requires the Secretary of the Interior to identify and designate National Energy Security Corridors for the construction of natural gas pipelines on Federal land. Strategic Transformer Reserve Requires DOE to submit a plan to Congress evaluating the feasibility of establishing a Strategic Transformer Reserve for the storage of spare power transformers and other critical equipment to temporarily replace critically damaged power transformers. Energy Reliability Allows for improved maintenance, upkeep, and certain other measures relating to electricity rights-of-ways (ROWs) on U.S. Forest Service and Bureau of Land Management (BLM) lands in an effort to increase electricity reliability and prevent forest fires. Federal Agency Energy Efficiency Requires federal agencies to coordinate with the Office of Management and Budget, DOE, and the Environmental Protection Agency to develop an strategy for the maintenance, purchase, & use of energy-efficient and energy saving information technologies. Federal Energy Efficiency Programs Requires the DOE to recognize voluntary verification programs for air conditioning, furnace, boiler, heat pump, and water heating products to demonstrate compliance with DOE energy efficiency and conservation standards and the Energy Star program. Coordination of Energy Retrofitting Assistance for Schools Directs DOE to establish a clearinghouse to disseminate information regarding available programs and financing mechanisms that could be used to help retrofit and build more energy-efficient schools.

Keystone XL Pipeline Timeline of Key Recent Federal Actions on Keystone XL Pipeline 2011 Temporary Payroll Tax Cut Continuation Act of 2011: An end-of-year bill temporarily extending payroll tax cuts is signed into law with a rider requiring President Obama to make a decision on the Keystone XL pipeline permit. Potential Actions in 114 th Congress 2012 2013 2014 Feb 2015 Nov 2015 State Department Permit Rejection: President Obama, acting with guidance from the Department of State, denied a permit to Keystone XL on the grounds that the 60-day window provided by Congress was not enough time to gain necessary additional information needed to give approval to the project. Draft Supplemental Environmental Impact Statement: The State Department issued a supplemental environmental impact statement arguing that a proposed alternative route would cause no significant impacts to resources; the EPA released a letter challenging the conclusions of the statement. A Bill to Approve the Keystone XL Pipeline: The Senate voted to directly approve the Keystone XL pipeline during the 2014 lame duck session, but the bill failed to pass by one vote. Keystone XL Pipeline Approval Act: The House and Senate passed a bill to directly approve the Keystone XL pipeline after the new Republicancontrolled Senate was sworn in, but President Obama vetoed the legislation, arguing that approval should be up to the executive branch. The Senate tried and failed to override the veto. President Obama rejects the Keystone XL Pipeline: Earlier in November, TransCanada requested to halt the review of the project, possibly to push the decision to the next president. President Obama formally rejected the pipeline. TransCanada is disappointed but will consider all options, including filing a new application. The veto (and failed override) of the Keystone XL Pipeline Approval Act meant Congress was not likely to pass legislation on the Keystone XL pipeline in 2015, and instead TransCanada waited for administrative approval or denial In November 2015, President Obama rejects the project following TransCanada s request to halt the review of the project Congress could try and override Obama s decision, but this approach has been unsuccessful in the past TransCanada suing Obama Administration and looking to the next president to reapply

2016 Legislative and Regulatory Calendar! Legisla-ve Regulatory Other January! February! March! 1! 2! 1! 2! 3! 4! 5! 6! 1! 2! 3! 4! 5! 3! 4! 5! 6! 7! 8! 9! 7! 8! 9! 10! 11! 12! 13! 6! 7! 8! 9! 10! 11! 12! 10! 11! 12! 13! 14! 15! 16! 14! 15! 16! 17! 18! 19! 20! 13! 14! 15! 16! 17! 18! 19! 17! 18! 19! 20! 21! 22! 23! 21! 22! 23! 24! 25! 26! 27! 20! 21! 22! 23! 24! 25! 26! 24! 25! 26! 27! 28! 29! 30! 28! 29! 27! 28! 29! 30! 31! 31! April! May! June! 1! 2! 1! 2! 3! 4! 5! 6! 7! 1! 2! 3! 4! 3! 4! 5! 6! 7! 8! 9! 8! 9! 10! 11! 12! 13! 14! 5! 6! 7! 8! 9! 10! 11! 10! 11! 12! 13! 14! 15! 16! 15! 16! 17! 18! 19! 20! 21! 12! 13! 14! 15! 16! 17! 18! 17! 18! 19! 20! 21! 22! 23! 22! 23! 24! 25! 26! 27! 28! 19! 20! 21! 22! 23! 24! 25! 24! 25! 26! 27! 28! 29! 30! 29! 30! 31! 26! 27! 28! 29! 30! July! August! September! 1! 2! 1! 2! 3! 4! 5! 6! 1! 2! 3! 3! 4! 5! 6! 7! 8! 9! 7! 8! 9! 10! 11! 12! 13! 4! 5! 6! 7! 8! 9! 10! 10! 11! 12! 13! 14! 15! 16! 14! 15! 16! 17! 18! 19! 20! 11! 12! 13! 14! 15! 16! 17! 17! 18! 19! 20! 21! 22! 23! 21! 22! 23! 24! 25! 26! 27! 18! 19! 20! 21! 22! 23! 24! 24! 25! 26! 27! 28! 29! 30! 28! 29! 30! 31! 25! 26! 27! 28! 29! 30! 31! October! November! December! 1! 1! 2! 3! 4! 5! 1! 2! 3! 2! 3! 4! 5! 6! 7! 8! 6! 7! 8! 9! 10! 11! 12! 4! 5! 6! 7! 8! 9! 10! 9! 10! 11! 12! 13! 14! 15! 13! 14! 15! 16! 17! 18! 19! 11! 12! 13! 14! 15! 16! 17! 16! 17! 18! 19! 20! 21! 22! 20! 21! 22! 23! 24! 25! 26! 18! 19! 20! 21! 22! 23! 24! 23! 24! 25! 26! 27! 28! 29! 27! 28! 29! 30! 25! 26! 27! 28! 29! 30! 31! 30! 31! Jan. 5: Congress enters 2016 session Jan. 10: DHS deadline for Real ID Act compliance Jan 11: Supreme Court session begins Jan. 31: ACA Open Enrollment Period ends Feb. 1: President s Budget Request (approximate date) Feb 22: Supreme Court session begins Month of Feb.: CFPB to issue predatory payday lending rules Month of Mar.: FDA to issue final requirements mandated by Food Safety Moderniza-on Act of 2011 Month of Apr.: Labor Department to finalize workplace injury and silica dust rules (approximate date) Month of June: EPA to finalize rules limi-ng methane emissions in the oil and gas sector July 15: August Congressional recess begins Month of July: Labor Department to issue final rules based on over-me pay execu-ve order Sep. 6: Congress returns from August recess Sep. 6: EPA deadline for states to submit Clean Power Plan compliance plans Oct. 1: Fiscal Year 2017 begins (deadline for appropria-ons) Oct. 7: Congress enters recess prior to elec-ons Month of October: SEC to finalize pay for performance rule on execu-ve pay transparency Nov. 8: Elec-on day Nov. 14: Congress returns from recess Month of November: FDA to issue final rules for addi-onal tobacco products, including e-cigarebes Month of November/December: Congress likely to vote on Trans-Pacific Partnership trade agreement (approximate date according to Congressional aides) Dec. 16: Congress ends 2016 session