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Finance & Revenue
Finance & Revenue
+Texas to Sports Betting Legislation
The sports: College and professional sports can be wagered
The license fee: $250,000
How many sports betting operations could operate in Texas? 5
Taxes:
- 6.25% per bet
The legislation : HB 1121 (2021 | TX )
+1 State Lege Taking Up Fantasy Sports
Wyoming’s SF 56 (2021 | WY) will pick back up with legalizing fantasy sports.
1 year ago, Wymoning legalized VLTs (video lottery machines).
What would the tax structure look like for the VLTs?
- 20% tax rate
- Profits after taxes are 50/50 split between the bars and the gaming companies
Casper Star Tribune | Legislature moves to make legalized gaming permanent in Wyoming
Crypto Currency Funding Pensions?
What’s the background of crypto currency and pensions systems?
- 2018 Berkeley, CA announces a plan tp issue bonds using blockchain, the foundation for cryptocurrency
- Ohio for a while allowed tax payments by bitcoin
- 2 Virginia public pension funds have invested in a blockchain venture empowered to own cryptocurrency
This begs the question, could pension funds be natural depositories to warehouse, re-market and profit from cryptocurrency?
Governing | Could States Cash in on the Cryptocurrency Craze?
Prevailing Exceptions to COVID Liability Protections
States are passing liability protections concerning the transmission of COVID, and 3 exceptions are at the forefront:
- Gross negligence
- Reckless misconduct
- Conduct with an intent “to discriminate based on race, ethnicity, national origin, religion, disability, sexual orientation or gender identity”
Who.What.Why.How. Wealth Taxes.
Who is pushing wealth taxes? “Left wing progressives”
What is a wealth tax? A tax on the market fluctuation of assets like homes, stocks, art
Why? “To curb extreme wealth accumulation and fuel trillions in new public spending by targeting everything that income, property and capital gains taxes miss.”
How many states have proposed a wealth tax? 9 including California and Hawaii
What have the brains said about the wealth tax?
- “wealth tax in some countries seems more efficient to repel [the] rich than to effectively redistribute wealth.” – Alain Trannoy, a French economist
Do some states have constitutional protections from a wealth tax? Yes, New York’s prohibition on taxing intangible property is seen as preventing a wealth tax
Local COVID Transit Funds
The Federal Transit Administration is adding $14 Billion for public transportation systems under the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA)
How will the funding breakdown?
- $13.27 billion to large and small urban areas
- $678.2 million allocated to rural areas and tribes
- $50 million allocated for the enhanced mobility of seniors and individuals with disabilities
Railway Age | FTA to Allocate $14B in COVID Relief for Public Transportation
Black Lives Matters. +1 City Creating Special Committee.
Add St. Paul, MN to the list of cities to address racial and systemic inequities.
The ordinance would create the St. Paul Recovery Act Community Reparations Commission.
The goals of the Commission will include closing gaps in homeownership, education, employment and health care.
KSTP | St. Paul City Council to consider forming Black reparations commission
COVID. How did the Kentucky Legislature Limit the Governor’s Pandemic Powers?
- SB 1 (2021 | KY) would limit Executive Orders to 30 days and require legislative approval to extend
- SB 2 (2021 | KY) would require a public hearing before new regulations could be imposed
What’s next for these bills? An anticipated veto + an anticipated veto override
WDRB | Bills restricting Kentucky governor’s emergency power pass legislature, head to Beshear’s desk
Sports Betting Legislation Back in Kentucky
HB 241 (2021 | KY) combines fantasy sports regulation, online poker and online sports betting.
Didn’t Kentucky try this last session too? Yes, but they’re back and adding online poker to the mix
What entity would regulate sports betting? The Racing Commission (horse racing)
How would online sports betting work?
- online wagering
- mobile wagering
- wagering at approved sports venues in the state (hello! racetracks)
- can wager on professional and collegiate contests
IGB | Kentucky to reconsider online sports betting in new bill
Legislation: State Preemption of Local Mask Ordinances
Where: Oklahoma
What: SB 224 (2021 | OK) would establish that state law concerning masks would preempt local ordinances both on public and private property
From the bill’s author: “government forcing private property owners to comply under threat of penalty is beyond their delegated powers.”
KOCO 5 | Proposed bill would prevent cities, counties in Oklahoma from mandating masks
New Houston Incentives for Eco Friendly Development
Which tax incentives did Houston upgrade for 2021?
- new property tax abatement program for developers who incorporate green stormwater infrastructure
- Up to 10 percent against their property tax increases
- opened LEED incentives that have not been open for the last 10 years
- 15 percent for platinum certification
California Committee Recommends Cannabis Rule Revisions
Cannabis Advisory Committee recommends that California roll back these rules:
- eliminate the $5,000 limit on the amount of pot that can be carried by delivery vans
- make it easier for small businesses to sell different products
- permit food and beverages to be served in cannabis lounges
All 17 of their recommendations are here: 2020 Annual Report of the Cannabis Advisory Committee
COVID Legislature: Vote from your Car
Kentucky is adapting to COVID positive legislators by permitting legislators to quarantine in their vehicles and vote from their vehicle parked on Capitol grounds.
It’s like a drive in but instead of a fun 80s movie, it is the Legislature.
Route Fifty | Kentucky Lawmakers Who Catch Covid Can Vote From Their Cars
State Budget Savings: Stop Printing Forms
The state: Missouri
The forms that the state won’t print: tax forms
Why? Cost savings and the majority of tax filers file electronically
What if you want to file a printed return? The taxpayer downloads and prints the form themself
Route Fifty | Seeking To Boost Savings and Safety, One State Eliminates Paper Tax Forms
How cities can benefit from AI (Artificial Intelligence)?
- AI friendly cities support AI jobs in telecommunications, information technology, software and transportation with starting salaries over $100,ooo
- more jobs, more economic growth
What types of AI jobs are in San Diego, a city that has embraced AI?
- 82% of total AI workforce works with machine or deep learning that is fundamental to predictive analytics
- AI tools in image, speech or video recognition (46% focus of AI jobs)
- Natural language processing (46%)
- Robotics (24%)
- Autonomous vehicles (21%)
San Diego Union Tribune via Governing | San Diego Would Benefit from City Expansion of AI: Study
2020 Recap: Money grows on weed
Where was there continual shock and awe for revenue this year? Cannabis. COVID left revenue holes and COVID funds are funding new and diverse programs from buying hotels for homeless, county fairs, event planners, restaurants and small business relief, grant programs, property tax relief grants, and PPE buying programs. Legislatures are taking control over Governors who overstepped. Voters are expanding the taxation of recreational drug use.
I don’t want to call new taxes innovative. So, let’s say the tax people got creative, maybe they ingested some of the cannabis that is now readily available to test the tax system. Here’s the new taxes they came up with: taxing IP revenue, collecting back taxes from online sales, streaming services, and Zoom.
State Budget Amendment to Benefit Hemp Farmers
Where: Massachusetts
The amendment: Would allow hemp farmers to sell their plants to legal marijuana dispensaries which allow hemp farmers into the CBD market
Boston Globe | Legislature extends a lifeline to Massachusetts hemp farmers
California Legislature COVID rules.
- 80House members will simultaneously convene from One Golden Center
- No guests on chamber floor
- Each legislator is permitted 1 essential staff member in the Capitol
- No Capitol visitors
- Face masks are required
- Social Distancing Required
COVID. Legislation Requiring Vaccinations for Health Care Workers.
The State: New York
The legislation: A11129 (2021 | NY)
New York’s A11129 would:
- prioritize distribution of the vaccine to long term care facilities
- require long term care facility workers to be vaccinated for COVID, influenza and pneumococcal disease
COVID. No Immunization Requirement Legislation.
The State: Tennessee
The legislation: HB13 (2021 |TN)
What would Tennessee’s HB 13 do? Prohibit state and local governments from “forcing, requiring or coercing” a person to receive a COVID-19 vaccination
COVID. Legislation Removing Required Immunizations.
State : Kentucky
What: BR 301 (2020 |KY)
How does BR301 change existing law that required immunizations in declared epidemic areas?
- Clarifies that nothing in state law requires immunization
- Removes language requiring immunizations in an epidemic area
- Named the Act: Ensuring Bodily Autonomy and Informed Consent Act
COVID. Legislature Proposes Vaccine Policies.
Where: New Mexico
What: HM 1 ( 2020 | NM)
What does HM 1 call on the Governor of New Mexico to do?
- adopt policies to promote nursing homes to use staff with acquired immunity
- adopt policies to aid retired people living at home to have groceries and other essentials delivered
- allow those who are not at greater risk of serious illness or death from coronavirus disease 2019 infection to immediately be allowed to resume life as normal
- adopt policies to open schools and universities for in-person learning
- adopt policies to resume sports, arts, music, cultural activities and extracurricular activities
North Dakota Legislature Mandates Masks with Enforcement
North Dakota legislators approved a mask mandate with possible enforcement options:
- removed by state troopers
- charged with a misdemeanor
- be expelled from the Legislature
- could be found out of order by the House or Senate presiding officer
Bismark Tribune | Some opposition brews to North Dakota Legislature mask mandate
Colorado Legislature Convenes with No Mask Mandate
Colorado Legislature convened with no mask mandate.
” a number of Republicans removed their masks while seated at their desks during committee meetings and on the floor”
AP | GOP aide sent home from Colorado Legislature had COVID-19
COVID Maine Legislature Relocates
The Maine Legislature will convene in a civic center.
Bangor Daily News | What we can expect when the Legislature comes together
Taxing IP Revenue
What is a patent box tax? A tax at a lower rate, usually, on income derived from IP
What type of IP revenue are we talking about? Software copyrights + patents
What’s the goal of lower tax rates for IP boxes?
- encourage and attract local research and development
- incentivize businesses to locate IP
COVID Legislation. Limits on Local Health Departments
Where: Michigan
What: HB6314 (2020 | MI)
What restrictions does HB 6314 put on local health departments? It says that local health departments can implement,ment different restrictions than state health department but that local restrictions cannot be more stringent that state restrictions
What does a remote Legislature look like?
Missouri is crafting plans for its Legislature to meet remotely.
Which party controls the State Legislature? Democratic Party
How will public testimony be taken? 16 sites across the state will be accessible for public comment, a system set up by the Missouri Senate
The Columbian | In Our View: Plans for remote Legislature session advance
COVID. State Bans Dancing.
Ohio has banned dancing at weddings in an effort to control COVID.
Ohio’s Order also includes a ban on buffet food and requiring banquet halls to adhere to social distancing.
Why does this matter? The Governor of Texas press conference in Austin, TX today indicated most enforcement of COVID restrictions had been handled by the Alcoholic Beverage Commission.
Route Fifty | Ohio Bans Dancing at Weddings to Curb Covid-19 Spread
Anatomy of a State COVID Contact Tracing Pilot Program
The state: Massachusetts
What type of tech does Massachusetts want to use? Bluetooth based tracking such as those developed by Apple & Google
Would MA continue with contact tracers too? Yes, an app would only bolster their efforts
Nevada has a similar program with a self reporting app based on bluetooth. How is the app going?
- App downloaded under 70,000 times
- Less than 3% of the state’s adult population
Mass Live via Governing | Massachusetts Looks to Fund Bluetooth Contact Tracing
COVID Funds to Lower Property Tax Bills
The State: Pennsylvania
How much federal CARES fund for COVID relief did Pennsylvania try to use to lower property taxes? $300 Million
How did this work through the Legislature:
- PA Governor and Republican legislative leaders agreed to the use of $300M to pay down property taxes
- PA Legislature passed legislation
- The Federal government rejected the use of COVID funds
What funding decisions are triggered for Pennsylvania lawmakers now?
- How to allocate $1.3 billion in remaining CARES Act money
- Can only be used for costs related to the public health emergency
- Cannot be used to fill revenue shortfalls
- State law says that money will go to the 60 least-populated counties should lawmakers fail to agree.
COVID Local Government Response: Racism is a Public Health Crisis
The Local Government: The Sacramento County Board of Supervisors
Other California Counties that have made the same declarations: Riverside, Santa Clara and Contra Costa
What will Sacramento County do in response? Take a more active role when making policy and allocating funding to address longstanding issues around race.
Sacramento Bee via Governing | Sacramento County Might Declare Racism a Public Health Crisis
Legislatures: Masks Optional
Indiana Legislature voted this month to convene its regular session in January 2021 with masks optional.
Vote reflected party lines. Republicans have super majority but won’t require masks.
When the vote occurred was the chamber open to the public? No
How many legislators did not wear masks? 2 sate representatives
How will the Legislature convene in January? The Senate will remain in its Chamber & the House will move to a larger state facility
Indianapolis Star via Governing | Masks Optional: Indiana Lawmakers Convene for Session
City of Austin COVID Tax Incentive Proposal
Who: Austin City Council
What: emergency tax incentive program
How would it work? Incentivize landlords into renegotiating commercial leases by offering commercial property tax reimbursements to landlords who renegotiate their leases and offer rent reductions to business tenants
“Drugs Won the 2020 Election”
That’s the headline from The Cut. What it really means- Drug Revenue won the 2020 Election.
Here’s the big picture from Election 2020:
- Oregon becomes 1st state to decriminalize possessing small amounts of any drug | Oregon’s Measure 110
- Arizona, Montana, New Jersey and South Dakota voted to legalize recreational marijuana in nationwide push to relax drug laws
The Guardian | Oregon becomes first US state to decriminalize possession of hard drugs
NY Times | Taxes, Heroin and Statehood: A Glimpse Into This Year’s Ballot Measures
+1 Local. Minimum Wage Raise
Not only did Florida increase the state minimum wage to $15. So did Portland, Maine.
Pre-COVID. This minimum wage ordinance had not been given the go-ahead by voters.
Voter Approval Rate: 60%
What else does the Portland Maine minimum wage ordinance require: Time and a Half pay for declared emergencies.
Portland Herald Press via Governing | Maine Voters Raise Minimum Wage and Approve Rent Control
Local Ballot. “Overpaid Executive tax”
Where: San Francisco
The voter approval rate: 65%
The goal of the tax: address income inequality in the city
When does the tax apply? “businesses in San Francisco where the highest-paid executive employee earns more than 100 times the median pay level for the company’s employees in the city”
What will be the applicable tax rate of this surcharge tax? “0.1% and 0.6% of a business’ San Francisco gross receipts, with the rate rising in steps as a company’s pay gap grows beyond the 100-times-median-pay threshold.”
The anticipated revenue: $60 million to $140 million annually
Does a similar tax elsewhere: Yes, Portland, OR has collected a similar tax since 2017
Rute Fifty | San Francisco Voters Approve ‘Overpaid Executive Tax’
States Collecting Online Sales Tax from Out of State Small Businesses
States are trying a variety of methods to obtain back sales taxes for products sold on Amazon marketplace.
What’s Amazon marketplace, a place where small businesses can sell their products to a larger audience.
So, are the states trying to collect back taxes from out of state small businesses or Amazon?
- California Department of Tax & Fee Administration is trying to collect from small businesses for sales back to 2012
- Other states taking the California approach: Massachusetts, Minnesota, Washington and Wisconsin
What are small businesses saying?
- They have an Association: Online Merchants Guild
- The Online Merchants Guild says online sellers on Amazon are more like suppliers than small businesses as they have no control over where their products go
- It’d be like going after black and decker for sales tax at a Home Depot
Which states are trying o recoup back sales taxes directly from Amazon and not the small businesses that sell on Amazon? South Carolina
How’s that going for South Carolina? It is in the courts
How are states trying to fix this legislatively? Marketplace facilitator laws, which have been passed in 33 of the 45 sales tax states
Did California Voters Curb the Property Tax Cap?
Short answer: don’t know yet if there will be a carve out from he property tax cap for business and industrial property
Current answer: Proposition 15 is 2.5% behind with 11 million votes counted.
When will a clearer picture emerge? next week
$200 M Ballot Gig Economy Initiative Passes
Where: California
What: November 2020 ballot proposition to except gig workers from a state law requirement that gig workers be classified as employees
The cost of passage: $200 Million +, the most expensive in California’s hisotry
The passage rate: 58% as of the day after election day
What do people say is next? Will these gig economy companies get swept up in the anti-tech sentiment in Congress and coming to state legislatures?
NY Times | Uber and Lyft Drivers in California Will Remain Contractors
Ballot Initiative Red State Raises Minimum Wage.
The State: Florida
What was the voter approval rate for Florida’s new statewide $15 minimum wage? More than 61%
When will the $15 minimum wage be in full effect? 2026
How did it pass? John Morgan, a lawyer and businessman in the Orlando area who backed the initiative with $5 million and said ““Every great society can crumble because the haves have too much and the have-nots don’t have enough.”
The opposition: Chamber of Commerce, Lodging Assoc., Restaurant Assoc.
Washington Post | Florida votes to raise minimum wage to $15 an hour
COVID. New Business Criminal Act for Food Industry
Where: New Jersey
What: A4765 (2020 | NJ)
What does A4765 do?
- Creates a 3rd-degree crime, punishable by a fine of $15,000, for a restaurant employee to spit into the food or drink of a law enforcement officer
- Employers would be required to suspend a worker charged with this crime
- Employers would face civil penalties if they fail to suspend the accused, but not found guilty, employee.
- Employers must terminate the employment of an employee who is convicted of this crime
Ballot Initiative: Redistricting Commission
State: Virginia
Did Virginians vote for a redistricting commission to handle redistricting? Yes, 66% approved the redistricting commission
Who will be on the redistricting commission? Elected Officials and Citizens
Do other states also have a statewide panel to handle redistricting? Yes, in 2018 Colorado, Michigan and Utah adopted redistricting commissions
In 2018 Missouri passed Clean Missouri that created a new, nonpartisan state demographer to draw legislative maps.
Governing | Voting Itself Becomes Question for Ballot Measures
Should state collected fees, paid during the pandemic, be returned?
Restaurants in California are calling on the state to return liquor fees paid during the pandemic.
Who: California Restraurants
What: Filed claims against local governments and the state for refunds of fees they’ve had during the pandemic
Which fees do they want refunded? liquor license fees, health permits and tourism assessments necessary to stay open during COVID-19.
State COVID Relief for County Fairs
Where: Iowa
How is the county fair relief being administered? Through the Governor Office and the Office of Economic Development
The funding? allocated up to $6 million of CARES funds
What are the eligibility requirements?
- Is a “Fair” as defined at Iowa Code section 174.1.
- Has continuously held membership in the AIF since at least March 17, 2020.
- Conducted a “fair event” as defined at Iowa Code section 174.1 (“Fair Event”) in Iowa in Calendar Year 2019.
- Held a Fair Event after March 17, 2020 but was subject to limitations or restrictions described in a Proclamation of Disaster Emergency issued by Governor Reynolds on or after March 9, 2020 or it canceled a Fair Event scheduled to be held in Iowa between March 17, 2020 and the submission date of the application for assistance through the Fund.
- Experienced a revenue loss for the period of October 1, 2019 through September 30, 2020 as compared with the corresponding period for the previous year.
KWQC | Gov. Reynolds announces new COVID-19 relief program for county fairs
2020 Ballot Proposition. Roll Back Property Tax Cap in California
What: Prop 15 (2020 | CA)
How will prop 15 work?
- Applies only to commercial and industrial properties
- Excepted commercial property: commercial agriculture
- The new property tax would be based on market value
- The estimated revenue: $8 billion and $12.5 billion in revenue per year
Supporters say:
- These taxpayers have had tax breaks for years
- The proposition will only affect big businesses worth at least $3 million
- Entrepreneurs and farmers will not be impacted
Opponents say:
- California already has unfriendly business tax laws
NY Times | California Tax Revolt Faces a Retreat, 40 Years Later
BLM Legislation. Call for National Juneteenth Holiday
Where: Ohio
What: HCR 33 (2020 | OH)
What does the resolution call for?
- Acknowledgement of those who marched to protest the social inequity and racism
- Asks Congress to establish a national Juneteenth holiday to help restore the U.S. status as a “beacon and symbol of democracy and freedom
BLM Legislation. Community Repair Panel
Where: Minnesota
What: SF 33 (2020 | MN), The PROMISE Act
How will the PROMISE ACT work to repair the community? With $125 million in fiscal year 2021 for awards to repair damaged property and small businesses
BLM Legislation. Commission on the Status of African Americans and Latinxs
Where: Rhode Island
What: HB 8133 (2020 | IL)
The Commission on the Status of African Americans and Latinxs will:
- provide research-based policy & practice recommendations to the Legislature and state offices
- help to ensure citizens equal access to government services and to propose changes to laws and practices that benefit other citizens at their expense
BLM Legislation. The Inclusive American History Commission.
Where: Illinois
What: HB 5851 (2020 | IL)
What does HB 5851 do?
- Creates the Inclusive American History Commission to develop guidelines for “multiperspective, inclusive and comprehensive” instruction in history
- While the Commission works, most American history curriculum is suspended in Illinois
New Revenue Estimates for Cannabis in Texas
If Texas legalized/decriminalized cannabis, what would the numbers look like in Texas according to Vicente Sederberg LLP ?
- $2.7 billion in cannabis sales annually
- $1.1 billion in marijuana tax dollars over the biennium
- 20,000-40,000 jobs directly created
- $10 million annually if business licensing fees (with a $5000 licensing fee)
- $311 million in savings per year in criminal justice resources
COVID & BLM. OKC Funds Small Business Recovery
Utilizing CARES Act Funds, Oklahoma City has created a program that funds minority small businesses.
Why is OKC prioritizing minority owned businesses?
- They’ve had a greater economic impact from he pandemic
- U.S. Chamber of Commerce warned in August that minority-owned businesses were denied in higher numbers for loans to help survive the pandemic
The Funding program:
- $2 million total grants
- for businesses with 25 or fewer employees
- Offering grants up to $25,000 each
Governing | Oklahoma City Gives More Funds to Minority Small Businesses
COVID. Economic Development Bill to Help Business Access PPE
Where: New York
How is New York connecting businesses, PPE and economic development?
- Create a tax credit for the purchase of PPE
- If the tax credit exceeds an allowable amount, the credit can carry over
- Creates a program for the state to purchase PPE and to sell it to small businesses at cost
COVID Funds to Help Small Businesses File for Bankruptcy. Only in NY
New York is temporarily adding bankruptcy legal assistance to its state funded legal assistance program to help businesses impacted by COVID restrictions
A11084 (2020 | NY)
COVID Funds. Helping Non-Urban Small Businesses with Commercial Rent.
New Jersey will put $6 million into a state program to help suburban & rural small businesses with rent payments if:
- the business leases space of less than 5,000 square feet
- grants are limited to $10,000 per grant.
S2983 (2020 | NJ)
COVID Funds. Grants for Bars Brews & Fish
Louisiana wants to help its fishermen, bars and breweries with funding from a new Bar Assistance Relief Program.
$2,000 grants if they have no more than 50 employees & are not subsidiaries of, or owned by, larger businesses HB85 (2020 | LA)
COVID Funds. State Business Loans to Cover Property Taxes
Michigan is proposing loans for small businesses to cover property taxes for businesses closed by executive order. Loans would have zero interest and 2 year terms. H6242 (2020 | MI)
COVID Funds: State Sets up Small Business Grants
South Dakota wants to use unspent COVID funds for business grants. Eligible businesses would have seen a loss of 25% of revenue and have revenue below $38.5M. SCR601 (2020 | SD)
Cannabis Revenue in Illinois By the Numbers
Total Revenue Collected: $100+ million since 1/1/2020 legalization
State revenue from 9 months of cannabis legalization: $69.7 million through the Cannabis Regulation Fund
Sales tax portion of cannabis legalization: $36.1 million from state and local sales taxes
Revenue that goes directly to cities: $16 million
How are state cannabis revenues allocated?
- 50% reinvested through the Restore, Reinvest and Renew (R3) Program in communities that have been disproportionately impacted by the justice system or directed to address substance abuse and prevention, and mental health concerns
2020 Cannabis Ballot Propositions
5 2020 State Ballot Propositions for Marijuana
- Arizona
- legalization with criminal justice reforms
- estimated sales by 2024: $700 million
- Opponents: billionaire casino magnate Sheldon Adelson, tire retailer Discount Tire, pharmaceutical company Insys, Arizona Chamber of Commerce and Smart Approaches to Marijuana
- New Jersey
- legalize cannabis for adults 21 and older
- 6.625% tax rate
- South Dakota
- medical cannabis program and registration system + legalization for all residents
- Montana
- legalization
- 20% tax on recreational cannabis
- Mississippi
- medical use only
This week Pennsylvania Governor also encouraged the Legislature to legalize recreational marijuana and to decriminalize it.
KDKA | These States Are Voting On Marijuana Legalization This November
COVID Legislation. Reigning in Gubernatorial Power.
The State: Arizona
What’s happening in Arizona: Claims the the Governor is asking law enforcement not to enforce restrictions against bars and restaurants that violate Executive Orders. The State Attorney General has taken issue with this approach.
Who should be picking the winners/losers (which businesses can be open): According to the Arizona Attorney General, that’s the Legislature’s job.
So what did the Legislature do? Created the Ad Hoc Study Committee on Legislative Oversight of Emergency Executive Powers
Arizona Capital Times | AG challenges governor’s emergency powers
AZ Mirror | Legislative committee hopes to curb Ducey’s emergency powers
#21 International Tax Competitiveness
The friendly folks at the Tax Foundation put together an index of the most tax competitive nations.
What does it mean to them to be tax competitive? “A well-structured tax code is easy for taxpayers to comply with and can promote economic development while raising sufficient revenue for a government’s priorities. In contrast, poorly structured tax systems can be costly, distort economic decision-making, and harm domestic economies.”
Who is #21? The U.S.A
What’s the top 10 look like?
- Estonia
- Latvia
- New Zealand
- Switzerland
- Luxembourg
- Lithuania
- Sweden
- Czech Republic
- Australia
- Slovak Republic
Where are the U.S. tax strengths:
- expensing for business investments
- Last-In-First-Out treatment of the cost of inventory
- Corporations can deduct property taxes
Where are the U.S.’s challenges?
- progressive income tax with a top rate of 46%
- does not exempt foreign capital gains income
- real property tax burden is among the highest
Tax Foundation | 2020 INTERNATIONAL TAX COMPETITIVENESS INDEX
The reasons why COVID Means More FinTech
- 73% say fintech is the new normal for personal money management
What regulation is necessary to maintain this growth in consumer fintech use?
- solid regulatory framework to foster that growth while protecting customers’ data privacy and security
- clear rules
- rules must have a pro-technology mindset
- stakeholders input is crucial to enact robust data privacy and security measures to ensure an acceptable level of safety and soundness in digital financial transactions
CQ Roll Call via Governing | COVID Accelerates FinTech Adoption for Users and Companies
COVID. Record Setting Lottery Revenue in Texas
The lotto revenue records:
- $6.704 billion in sales during its 10th-consecutive record-breaking year
- $452.5 million increase (7.2%) from 2019
- $1.684 billion goes toward Texas education and veterans.
- $1.661 billion to the Foundation School Fund
- $22.2 million to the Fund for Veterans’ Assistance
Reform Austin | Record-Setting Year for Texas Lottery as Texans Play More During Pandemic
How goes it in PA to use Cares Act Funds for School Choice?
How much CARES Act funding is PA trying to appropriate? $1 Billion
What are education advocacy groups suggesting as options?
- Cash payments to parents to use for supplies, therapy, school costs via education scholarship accounts
- $500 Million would translate into $1000 per family with students
- The ESAs would be first come first serve with priority to low income families
Is PA creating the wheel with this ESA program structure? No, Arizona, Florida and Nevada have enacted ESA programs
What do teachers and administrators say should happen with CARES funds? Distributed to the 500 school districts
Streaming Services + Local Wire Tax in Texas? Welcome to 2020
What’s happening? The City of New Boston wants streamers pay 5% of their local gross revenue as a fee
What’s the City’s argument?
- The rules in Texas are that streamers have to file an application with the Public Utility Commission of Texas for certification
- Netflix and Hulu did not
- Even though they didn’t they still have to pay the quarterly franchise fee.
is this new and novel? No, of course not, it’s been tried before and is still pending in court in Missouri from a 2018 suit by Creve Couer, MO. There Netflix said it isn’t a video service provider and thus the rules did apply.
What does this smell like? A revenue generating issue for a pandemic Legislature.
Hollywood Reporter | Texas Town Sues Netflix, Hulu Over Utility Fees
Law 360 | Netflix, Hulu Want Texas City’s Bid For Wireline Fees Tossed
Anatomy of a sales tax for homelessness
Where: Denver CO
B2 on the November ballot will increase Denver’s sales tax by 0.25%, making the total sales taxes 8.56%, up from 8.31%.
How much revenue would the homeless resource sales tax raise? An estimated $40 million per year
Is this a standalone measure to address homelessness? No, it would work with the current social impact bonds in Denver to address homelessness.
What do Denver’s social impact bonds for homeless resources fund?
- The Colorado Coalition for the Homeless and the Mental Health Center of Denver use police arrest data to identify people experiencing chronic homelessness
- This partnership helps identified chronic homeless in contact with housing and health, food, transportation, and legal and other support
COVID Reforms + Texas State Senate Elections
The Senate District: SD 6, running including Brenham, TX & Katy, TX
The incumbent Republican, Chair of the Senate Health and Human Services Committee, on pandemic lockdowns:
“Another of the key issues will be to reform how public health intersects with our constitutional rights and liberties,” she said. “All businesses are essential to someone and there must be more checks and balances about how the draconian public health policies we have seen this year can be used as pretext to take away our liberties and freedoms.”
Let’s dissect it:
- can’t rest the authority in 1 person, like the Texas does now, in the Governor
- need standards before business are shut down
- this is about constitutional liberties and freedoms
- we’re broaching on eminent domain concepts, like compensation, when we shut down businesses or limit people’s freedom
Victoria Advocate | Sen. Kolkhorst, Katy attorney vie for District 18 State Senate seat
+2 COVID Legislative Fixes in Texas
Sometimes you read an editorial, and that editorial gives you a laundry list of legislative action, just like this one did for Texas:
- A bill that moves pandemic response control to health agencies, which Texas legislature considered after Ebola, but which died in Committee
- An inactive Pandemic task force that didn’t meet often. If you think task forces aren’t going to have required meeting schedules, you’re not paying attention. Welcome to 2020, where the level of attention has intensified.
COVID Funding for School Vouchers
Where: Pennsylvania
The legislation: HB2696 (2020 | PA)
What would this bill do? the “Back on Track” bill will give a $1,000 voucher to parents for every K-12 child
What are allowable educational expenses for parents? tuition and fees, textbooks, school uniforms, testing costs, instructional materials, computer hardware or software, counseling services + others
Forbes | Pennsylvania Poised To Turn CARES Money Into School Vouchers
Benefits of Sports Betting Using CryptoCurrency
Supporters of using cryptocurrency for sports betting say:
- it allows bettors to remain anonymous
- payouts and payments are electronic and nearly instantaneously
- no surcharges on crypto currency payouts or deposits
Sports Daily | The Benefits of Sports Betting Using Crypto Currency
Police Union Initiative to Curb Protests
Where: Portland Oregon
What proposal to curb protests is being supported by the Portland Police Officer union?
- Give local governments authority to restrict the time, place, and manner of protests
- Establish a 10 p.m. noise ordinance for First Amendment-protected activities located near residential areas
- Establish a 12am noise ordinance for all other locations
- Blocks the imposition of fees and permits for demonstrations deemed legal
- Prohibit any barriers or blockages on sidewalks
- Prohibit destruction of any public or private property, the setting of fires, and ban the possession of use of fireworks, flammable explosives and laser pointers at demonstrations
Ballot initiative name: “protect free speech and safe streets.”
Economic Incentives for Child Care Centers via CARES Funds
New York is pondering S8990 (2020 | NY) which would provide financial incentives for child care centers to cover additional hours related to pandemic time constraints.
Its dual purpose goals: Open day care centers and for longer hours to help parents return to work.
What is a remote learning education expense credit?
A proposal to allow Illinois residents a tax credit for the costs of remote learning education because of COVID.
The policy reason for it? because it is costly to parents to have to leave or tale time from their jobs to provide for remote learning education.
What kind of expenses will the tax credit apply to?
- child care
- materials necessary for online learning
- tutoring materials
- homeschool instruction
The state tax the credit will apply to in Illinois: Illinois state income tax
The legislation: HB 5835 (2020 | IL)
COVID Funded State Childcare Program
The State: Pennsylvania
The childcare program: COVID-19 Childcare for Essential Workers Grant program
How is the program funded? CARES Funds
Who is eligible: “essential workers” including those working in health care, food manufacturing or food, retail, janitorial services, transit and other industries not closed during the state’s health emergency
When does the program expire? 3 months after the emergency declaration ends in the state
The legislation: HB2809 (2020 | PA)
+1 Governor BLM Riot Protest New Proposals. New Restrictions.
The state: Texas
The new restrictions on protest, demonstrations, riots, support rallies, opposition rallies- whatever your word preference is:
- causing injury or destroying property during a riot would be considered a felony
- Assaulting a law enforcement officer during riot would lead to a mandatory jail sentence of at least six months
- The use of fireworks during a protest or riot a crime
- New felony to aid riots through funds or assistance from organizations
CBS DFW | Texas Gov. Abbott Announces Proposals For Harsher Penalties To Those Involved In Riots
BLM Legislation. Governor Proposes Protest Restrictions
Where: Florida
What new restrictions are proposed?
- new felony crimes when property is damaged
- new felony when people are injured as a result of protests involving seven or more individuals
- new crime to obstruct traffic during unpermitted protests or demonstrations
- eliminate bail or bond for people involved in violent protests
Echoing a proposal in Texas, the Florida Governor also proposes to punish local governments that reduce spending on law enforcement agencies, by withholding state funds and grants.
This is a great reminder that elected officials rarely recreate the wheel. Imitation is after all the greatest form of flattery.
ClickOrlando | Gov. Ron DeSantis asks state legislature to pass protest proposal
+1 State Adapts Booze Delivery Rules. New Economy. COVID.
The state: Georgia
What steps did Georgia take to adapt its alcohol regulations in this new economy? The Legislature passed a bill in June to establish requirements for businesses that want to deliver alcohol.
The legislation: HB 879 (2020 | GA)
Which businesses can be approved for home delivery?
- liquor stores
- supermarkets
- convenience stores
- restaurants
What other alcohol law changes were made in this COVID related bill?
- allowing tastings of beer, wine and sprits from just wineries and distilleries to package stores
- Aligns Sunday sales for purchase and consumption to 11am
What is not included in the new delivery provisions? Deliveries from breweries, distilleries or wineries
WABE | Gov. Kemp Signs Bill Allowing Alcohol Delivery With Restrictions
Athens Banner Herald | Georgia issues rules for home delivery of booze
Gig Economy Labor Laws. What do the numbers say?
In California, tech companies support a November ballot proposition to overturn a new California state law that treats gig economy workers as employees and not independent contractors. The tech companies have committed $90 million to the ballot initiative to overturn the state law.
Here’s the polling by UC Berkeley Institute of Governmental Studies:
- 39% support the tech companies to overturn the law
- 53% of Republicans support the overturning of the law
- 36% support the current law and will note NO
- 42% of Democrats opposing
- 25% are undecided
Why does this matter? Refreshing our recollection, this legislation also captures workers it did not intend to like magicians and stand up comics.
How much have tech companies spent on the ballot initiative? more than $180 million
Los Angeles Times via Governing | Uber, Lyft Face Uphill Struggle for Gig-Worker Votes
BLM Legislation: RIOTS
This legislation is as popular as sweet ice tea is in the South.
Michigan: HB 6204 (2020 | MI) makes assaulting a first responder a felony. This includes spitting.
Michigan: HB6158 (2020 | MI) exempts from liability governmental agencies that are performing their governmental functions, like dealing with a riot.
Ohio: HB735 (2020 | OH) requires law enforcement to wear a clearly visible badge and identification while on duty.
Virginia: HB5125 (2020 | VA) defines a riot as an assembly of 3+ persons with an intent to commit acts of unlawful force or violence that could jeopardize public safety, peace or order. Makes rioting a Class 1 misdemeanor. & if you have a weapon, it is a Class 5 felony.
New Jersey: A4432 (2020 | NJ) requires the state Attorney General to create an outreach campaign to educate the public on legally protesting and demonstrating
Minnesota: HF2 (2020 | MN) requires its Insurance Commissioner to report on the number of businesses filing claims because of riots and whether those policies increased in price or were cancelled
State Investment Policy Adds ESG
What is ESG? Investments that address environmental, social, and/or governance considerations. Often referred to from the corporate side as corporate social responsibility
What state added ESG to its state fund investment policies? Oregon, as long as it doesn’t interfere with
What the state treasurer said: “By formalizing our expectations that ESG is an important facet to consider as we evaluate investment opportunities, we’re saying to the companies and managers we invest in that how you do your work matters. We’re also confirming to staff that improving our understanding of how ESG relates to the bottom line matters, too,”
What did the state Oregon Investment Council say? the revised top-down policy should not interfere with the system’s fiduciary duty to its beneficiaries, in deference to advancing a social cause
Chief Investment Officer | Oregon Integrates ESG Formally into Investment Policy
+1 State Passes a Millionaires Tax
The State: New Jersey
The deal to pass a millionaire’s tax in New Jersey: The blocked millionaires passed after a $500 tax cut for families with income under $150,000
The proposed millionaire’s tax:
- the increase applies to income between $1 million and $5 million
- the tax increase will apply to dollars above $1 million
- the new tax rate above $1 million will be 10.75%, up from 8.97%
State Regulator Tips for Keeping your Office Fantasy League Legal when Daily Fantasy Sports Isn’t Legal
Arizona Department of Gaming is offering tips to keep your friendly office pools alive and legal.
Any lingo I need to know going into this? Arizona talks about these office pools and friend bets as “social gambling.”
Here’s what the agency is saying:
- host or hosts “cannot receive financial benefit outside participating in the game.”
- all pool money must be paid to the winner or winners
- nonparticipants cannot receive pool money
- no participation fee
- host cannot keep a percentage of the pool for administering the game
- No minimum purchase to participate (no food, no alcohol)
BLM Ordinance. City Bans Ketamine Use by 1st responders.
Where: Auora Colorado
What sparked this ordinance to prohibit 1st responders from administering ketamine? “the death of Elijah McClain, a 23-year-old Black man who died after he was given the drug in police custody”
Why was ketamine used? To subdue suspects during arrests
What groups support the ban? The Colorado Society of Anesthesiologists
Gig Economy. Unintended Consequences of reclassifying Independent Contractors as Employees
As we know, and have seen on repeat on InfoHive, California passed AB 5 which reclassifies Gig Economy workers as employees following California Supreme Court ruling to the same effect.
AB 5 will also be on the November ballot as opponents seek to over turn it.
What are these unintended consequences? Looping in other independent contracts like comedians, magicians, freelance journalists, interpreters, mall Santas, freelance physical therapists
The takeaway: Drafting legislation matters and is a delicate and long process
COVID. State Legislatures Allowing Fines for No Mask Use
Mask Wearing by the numbers:
- 34 States have mask wearing mandates
- 200,000 COVID cases between March 31 and May 22 averted because of mask use according to the journal, Health Affairs
The states that are getting tougher on mask wearing:
- New Jersey S2814 (2020 | NJ)
- not wearing a mask during a public health emergency & entering a store or retail business, if signage is posted, would be classified as trespass
- petty disorderly persons offense punishable by a fine of up to $500, up to 30 days in prison, or both
- Minnesota HF10 (2020 | MN)
- Allows businesses to refuse service for not wearing a mask
- Pennsylvania SB1287 (2020 |PA)
- Creates a second-degree misdemeanor to willfully fail to wear a mask or face covering as required by the governor’s public health emergency declaration
- Classified as reckless endangerment, conduct that could place another “in danger of death or serious bodily injury.”
Governing | Lawmakers Get Tough with Mask Requirements: Legislative Watch
What’s a hometown tax program?
Where do we find a hometown tax program? Japan
What does a hometown tax program allow? Allows taxpayers to make donations to any participating municipality in the country — often in return for a small token of appreciation in the form of local produce. The donated amount is then deducted from the taxpayer’s annual local tax bill.
What’s the benefit? benefit to rural areas as 92% of the population lives in urban areas
Has it worked? In 2019, it accounted for 500 billion JPY (around $4.7 billion USD) in revenue for local governments
COVID RESPONSE. State Corporate Tax Transparency Legislation. Sunshine on Taxation & Tax Credits.
The legislation: California’s SB 972 (2020 | CA) awaiting Governor signature
What would corporations have to disclose under this bill?
- How much they pay in state taxes
- The amount of their state tax credits, exemptions, incentives, and deductions
Why did the author say this is bill is important because of COVID? Because large corporations are profiting and small businesses are struggling during the pandemic.
Which corporations would be required to make the disclosures? Companies with gross receipts of $5 billion or more — an estimated 400 to 500 companies.
Is this unique to California? No, 15 other states that require corporations to disclose state tax information
BLM Police Reform Bill Package with a Grant Program
The Wisconsin Governor and Lt. Gov. are proposing the following 9 legislative changes in response to BLM. To up the ante, the Governor called a special session on these too:
- Establish statewide use of force standards for all law enforcement agencies identifying the use of deadly force as only allowable as a last resort and that such use of force should be limited to the least amount of force necessary.
- Require officers to complete eight hours of training on the use of force and de-escalation techniques annually.
- Create a $1 million grant program, administered by the Department of Justice, to fund community organizations that work to mediate conflicts.
- Require law enforcement agencies to develop policies banning the use of chokeholds.
- Require law enforcement agencies to prepare policies for the use of force and make such policies publicly available.
- Put in statute a civil cause of action against unnecessarily calling police for the intent of infringing on a person’s constitutional rights.
- Prohibit no-knock search warrants.
- Require additional training and hiring standards for police departments, jails and juvenile detention centers.
Lake Geneva News | Governor urges legislature to act on police reform after Kenosha shooting
Unintended Consequences. When Regulatory Acts Reclassify Daily Fantasy Sports
What regulatory acts are being identified as re-classifying Daily Fantasy Sports as gaming/gambling?
- The IRS. A General Advice Memorandum compares daily fantasy sports companies to sports gambling companies and are thus “liable for the excise tax on wagers”
- Colorado Department of Regulatory Agencies is transferring oversight of Daily Fantasy Sports from Director of the Division of Professions and Occupations to the Director of Gaming
Potential impact:
- Litigation from larger operators
- Burden of entry for smaller, startup daily fantasy sports operators
COVID Liability Legislation. Where are we?
States are limiting liability related to COVID in varying ways, here’s the latest sampling:
- NEVADA provides limited liability for businesses that are in substantial compliance with safety regulations and orders SB 4 (2020 | NV)
- LOUISIANA offers limited liability to schools and charter schools + colleges and universities if HB 59 (2020 | LA)
- TENNESSEE doubled up on immunity for governmental entities SB8009 (2020 | TN)
- VIRGINIA is extending limited liability protection for the PPE industry SB5098 (2020 |VA)
- MICHIGAN granting limited liability protection for PPE industry, cleaning and disinfecting supply industry & the insurance policies that extend to all of these SB 1024 (2020 | MI)
All of these share the common attribute that protection does not extend to gross negligence, willful, wanton, intentional …the usual suspects of legalese.
Governing | States Act to Limit COVID-Related Liability: Legislative Watch
BLM Prison Reform
Where: New Jersey
What: SJR 94 (2020 | NJ)
How is New Jersey looking to adapt its prison reform based on BLM?
- TASK FORCE to study racial bias within the state’s criminal justice system
- The Task Force members will be:
- 2 members of the General Assembly, one who is a member of the Legislative Black Caucus and one who is a member of the Legislative Latino Caucus, appointed by the Speaker of the General Assembly
- 2 members of the Senate, one who is a member of the Legislative Black Caucus and one who is a member of the Legislative Latino Caucus appointed by the President of the Senate
- Attorney General
- Superintendent of the New Jersey State Police
- Chief Justice of the Supreme Court
- President of the New Jersey Prosecutors Association
- Executive Director of the Juvenile Justice Commission
- Commissioner of Corrections
- Public Defender
- 6 members of the public, appointed by the Governor, who represent communities and community-based advocacy groups that reflect the diverse economic, racial, cultural, gender, and occupational composition of the State. 3 of these 6 members of the public should have knowledge of or experience with the New Jersey criminal justice system.
COVID Prison Reform.
Let’s start with the numbers the reformers talk about:
- US leads the world in the # of incarcerated per 100,000 citizens
- 500% increase in jail & prison population in the last 40 years
- 10% of all the Black men in America are in jail or prison
- Top 10 COVID clusters in the US are prisons/jails
- 18 of the top 20 COVID clusters in the US are prisons/jails
What state legislation is percolating?
- UTAH
- Public Health emergencies allow for sentencing changes HB 610 (2020 | UT)
- VIRGINIA
- Provide early release for elderly, ill, or/& disabled if they’ve served at least 5 years SB 5018 (2020 | VA)
Governing | COVID Prison Disaster Prompts Reform Bills: Legislative Watch
TX Attorney General Opinion. TRS Investments. What is a security?
Texas Attorney General Opinion KP- 0328 answers whether real estate investments qualify as a security under Texas law.
The answer: it’s complicated
- The Texas Constitution still says investments must be in securities and hasn’t been updated to correct previous Attorney General Opinions that said no to investing in real estate
- But, the Texas State Securities Board notes that real estate investments can be in the form of a “real estate securities”
- it’ll depend on the individual investment
COVID. A Legislature + A Rules of Procedure Fight = A remote Legislature
The state: Virginia
The rules fight happened where? Not at the Capitol, but at meeting with spaced-out desks in VCU’s Siegel Center
What prevailed? Remote legislative sessions and remote committee hearings.
Concerns about remote convening? Disproportionately impacts rural members who do not have broadband access
COVID Legislation. Business Liability.
The State: Idaho
The legislation:
CORONAVIRUS LIMITED IMMUNITY ACT
Immunity for Good Faith Actions
Another version of Immunity for Good Faith Actions
The end result: Passed blanket immunity except for intentional acts and a workers comp carve out
BLM Response. Protestor Criminalization Legislation.
Where: TN
What: HB 8005 (2020 | TN)
How:
- people who illegally camp on state property
- will face a Class E felony, punishable by up to six years in prison
- those found guilty of the felony lose the right to vote
- mandatory 45-day sentence for aggravated rioting
- fine for blocking highway access to emergency vehicles
- enhances punishment for aggravated assault against a first responder to a Class C felony
What happened around the TN Capitol related to this bill?
- 2 months of sustained protests outside the state Capitol
- Governor signed
- Concerns that non-protesting homeless will be arrested under this legislation
The Hill | Tennessee governor signs bill increasing punishments for certain protests
BLM Related Legislation. Connect Non-Profits & Newly Released Incarcerated
New York’s S8689 (2020 | NY) connects soon to released incinerated persons with non-profits that can assist with housing needs.
Making the connections to housing and other services 45 days before release to better prevent discrimination in provided services.
How a state FINED a county
Which state? California
California fined which local government? Los Angeles County
How did California fine Los Angeles County? Because LA County used tax payer funds to pay for PR for a proposed sales tax increase.
TX Lege 2021: 1st Salvo. Disaster Power Limitations Legislation
Who: Bryan Slaton@BryanforHD2
What legislation is Slaton saying will be his first? To amend the emergency disaster powers available to the governor through the Texas Disaster Act
Why? To end the abuses of the Disaster Act. + He believes Republicans can’t only oppose abuses of power when it is a Democrat.
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