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BPAA Federal Policy Update - September 21

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MUSIC LICENSING                           

  • Music Modernization Act Approved By The Senate: The U.S. Senate passed the Music Modernization Act by unanimous consent Tuesday evening. This Senate version will go back to the House where it needs to be voted on again because of the changes the Senate made to the bill. Republican Sen. Lamar Alexander says he hopes bill will pass next week. If the House approves the new version, it goes on to President Trump for his signature. The House passed its own version of the bill in April 415-0. Read more at Billboard.

TAX

House tax package, H.R. 6756, H.R. 6757 and H.R. 6760 will be considered next week, according to House web site (approximate cost of $657 billion over a decade):

  • H.R. 6760 to make permanent certain provisions of the Tax Cuts and Jobs Act affecting individuals, families, and small businesses;
    • The Protecting Family and Small Business Tax Cuts Act (cost about $631 billion) would permanently lower the tax rates for individuals and pass-through rates for businesses, as well as preserve a larger child tax credit and the approximately $22 million estate tax exemption for couples, which was doubled in the 2017 law. It also expands the medical expense deduction for an additional two years.
  • H.R. 6757 to encourage retirement and family savings; and
    • The Family Savings Act ($21 billion) would allow small businesses to more easily offer 401(k) plans, as well as new individual savings accounts for education and newborns.
  • H.R. 6756 to promote new business innovation.
    • The American Innovation Act ($5.4 billion) would allow startups to write off more of their costs.
  • NOTE: Senate is unlikely to vote on making the tax cuts permanent but could consider some of the more narrow retirement or startup tax issues
  • Five congressional tax-writers — two on the Senate Finance Committee and three on the House Ways and Means Committee — are fighting for their political lives in midterm election races. The outcomes may have consequences for tax policy and add to the upheaval on these panels.
    • The Cook Political Report lists Ways and Means Republicans Peter Roskam (Ill.), Erik Paulsen (Minn.), and Mike Bishop (Mich.) and Finance Committee Democrats Bill Nelson (Fla.) and Claire McCaskill (Mo.) as currently being in competitive races that candidates of either party could win.
    • The committees are already gearing up for other membership changes, including the retirement of Finance Chairman Orrin Hatch (R-Utah), which means that either Chuck Grassley (R-Iowa) or Mike Crapo (R-Idaho) could lead the committee in 2019 if Republicans maintain control of the Senate. In other words, Ways and Means could have a radically different composition, and Finance’s priorities could change. A Democratic takeover of the House would mean a focus on trying to unravel parts of the 2017 tax law, such as the $10,000 cap on state and local tax deductions; efforts to get President Donald Trump’s tax returns; and new emphasis on family and working class issues like the earned income tax credit.
  • Bloomberg Government reports, Storm Brewing in States Over Federal Deduction Cap: States will have few options in trying to circumvent the cap on the state and local tax deduction if the House Republicans succeed in making it permanent. Democrat-leaning, mostly high-tax states that have led the charge to circumvent the $10,000 cap have begun to fire back at the effort, which is part of a bill (H.R. 6760) approve--d by the House Ways and Means Committee Sept. 13. Politicians have vowed retaliation, calling the move to extend the cap “beyond shameless” and “an attack on blue states.” If the extension passes Congress, tax practitioners say, states and their affected taxpayers will lack any practicable workaround because of recent IRS regulations that limit the most popular state response to the cap on state and local tax (SALT) deductions. The Ways and Means Committee rejected an amendment introduced by Rep. Bill Pascrell (D-N.J.) that would have repealed the cap, which was imposed by the 2017 tax law. Even if the House succeeds in passing the bill, the Senate is unlikely to endorse it. 

 

ACA PROVISIONS

  • House Republicans plan another legislative assault on Obamacare as the campaign for congressional midterm elections heats up. This time lawmakers will debate a measure that would suspend until January the requirement that companies with more than 50 employees sponsor health-insurance plans for their workers. The bill, H.R. 3798, would narrow the number of workers these companies must ensure by raising the minimum time employees must work to become eligible for coverage to 40 hours a week from 30 hours.

 

LABOR

  • Bloomberg Government reports, US Appeals Court Rules for Bartenders, Waiters in Tip Fight: Restaurants must pay waiters and bartenders minimum wage when they are engaged in tasks such as cleaning toilets that are unrelated to their main jobs and do not offer tips, a divided U.S. appeals court ruled Tuesday. At issue in the decision by an 11-judge panel of the 9th U.S. Circuit Court of Appeals was a federal law that allows an employer to pay workers who receive tips as little as $2.13 an hour as long as their tips earn them minimum wage. Employers cannot use that tip credit when the workers are engaged in unrelated tasks that don't pay tips, the panel ruled in a 9-2 decision. Employers also can't use the tip credit for tasks related to bartending or serving such as preparing coffee if employees spend a substantial part of the work week on them. The impact of the ruling appeared limited. Seven states require that employers pay workers the state minimum wage on top of any tips they receive, according to the labor department's wage and hour division. Six of those states fall under the 9th Circuit's jurisdiction: California, Alaska, Montana, Nevada, Oregon and Washington. The ruling upheld a regulation by the U.S. Department of Labor and subsequent guidance that limited employers' use of the tip credit. It also revived lawsuits against restaurant chains by 14 bartenders and servers. The defendants include P.F. Chang's China Bistro and J. Alexander's.

 

SPORTS BETTING

  • Legal Sports Report: Congressional Hearing On Federal Sports Betting Oversight Confirmed For Next Week: A U.S. House of Representatives subcommittee will meet Thursday morning, September 27, to discuss legal sports betting, a source confirmed today to Legal Sports Report.
    • The meeting entitled “Post-PASPA: An Examination of Sports Betting in America” will take place at 10 a.m. Thursday in the House Subcommittee on Crime, Terrorism, Homeland Security, and Investigation. That’s a subcommittee of the House Judiciary Committee.
    • The continued confirmation proceedings for potential Supreme Court Justice Brett Kavanaugh placed some doubt on whether the rumored hearing would continue. A source familiar with the subcommittee’s plans confirms that it will take place.
    • The hearing will likely feature representatives from both the NFL and the American Gaming Association.
  • Legal Sports Report: How Kavanaugh’s History With Sports Betting Could Affect Him – And You: The recent hearings into the suitability of Judge Brett Kavanaugh to serve on the Supreme Court of the United States have raised many important questions. Kavanaugh faces serious scrutiny regarding allegations of sexual assault, as has been widely reported. We look today though at his views toward sports betting integrity. Prior to the assault allegations, Kavanaugh’s confirmation hearings have divided the public and elected officials along ideological lines, with many Democrats arguing that Kavanaugh’s past statements, opinions, and scholarship are disqualifying. Many Republicans argue Kavanaugh is an accomplished jurist in the mold of many conservative judges before him who were confirmed, often with bipartisan support. The earlier debate over Kavanaugh’s qualifications is the new normal in our hyper-politicized times, but there are some questions answered by Kavanaugh that might also provide important lessons for protecting sports betting integrity. Read full story here.
  • Proskauer – Blockchain and the Law: Blockchain and sports gambling seem to be a natural fit. Sports gambling has been at the forefront of the news cycle since the U.S. Supreme Court struck down a federal statute that banned states from authorizing sports gambling in Murphy v. NCAA. Since then, New Jersey, Delaware, Mississippi and West Virginia have passed laws allowing wagering on the results of certain sporting events. New York, Pennsylvania and Rhode Island are quickly moving towards the legalization of sports gambling and a number of other states are expected to follow.
    • Blockchain has already proven to be a reliable partner for online casino gambling. In the past few years, a fruitful relationship between online casino gambling platforms and blockchain technologies has developed. Satoshi Dice, which first gained popularity in 2012, allows users to gamble their cryptocurrency through a blockchain-based, peer-to-peer dice prediction game. Virtue Poker, a ConsenSys-backed, decentralized poker platform, uses blockchain to ensure that casino operators (the “house”) cannot tamper with the integrity of a wager. And ZeroEdge uses smart contracts and blockchain to eliminate the “house” fee that is typically passed on to gamblers.
    • Thus, given the opening for sports gambling, it is easy to imagine a relationship forming between sports betting and blockchain technologies. Blockchain may allow casino operators and other entities to reduce transaction fees, speed up payment processing, increase gambler anonymity and flag problematic transactions. Some sports betting entities, such as daily fantasy sports behemoth FanDuel, have already begun exploring such opportunities.
    • However, even within states that have already legalized sports gambling, there are still a number of factors to consider for those aiming to utilize blockchain technologies within their sports betting platforms. Read the rest of the story here.

 

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