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Legislative

After months of trading punches Director Mick Mulvaney of the White House’s Office of Management and Budget (OMB) and Treasury Secretary Steven Mnuchin released a memorandum of agreement (MOA) that creates a new framework for writing, reviewing, and implementing tax regulations.  In short, the MOA requires OMB’s Office of Information and Regulatory Affairs (OIRA) to review major tax regulations—just as it does major rulemakings from any other executive branch agency.  This is a fundamental change from a 1983 agreement, under which Treasury had hitherto operated, that exempted most tax regulations from review.

On Wednesday, the House Ways and Means Committee marked up and unanimously reported 12 bills to reform the IRS. The bipartisan packaged was sponsored by Oversight Subcommittee Chairman Lynn Jenkins (R-KS) and Ranking Member John Lewis (D-GA) and is designed to modernize the IRS and improve customer service. The package requires the IRS to send Congress by September 30, 2020 a comprehensive written plan for reorganizing the agency, including priorities laid out by lawmakers.
As you know, both corporate and individual tax rates were reduced in last year’s Tax Cuts and Jobs Act. Lower tax rates make tax-exempt vehicles like municipal bonds less attractive to both corporate and individual investors; with lower tax rates, they have less incentive to look for tax-exempt investments. Reduced demand for municipal bonds and other tax-exempt investment vehicles like private activity bonds (PABs) means that cities will have to increase the interest rates on new bond issues in order to attract investors.
With the omnibus having been passed by Congress, substantive legislative work will wind down until after the elections in November. There are, however, a few outstanding tax/financial issues to note.
Despite a strong last minute effort, Rep. Kristi Noem (R-SD) did not succeed in getting her Remote Transactions Parity Act (RTP) into the omnibus package passed today by the House and expected to be passed by the Senate by Friday.
Yesterday, the House Ways and Means Subcommittee on Tax Policy held a seven-hour, 4 panel hearing on the fate of tax extenders—temporary tax extenders like those for biofuels or short-line railroads. While they were just extended retroactively for 2017, they have again expired and currently are not available for 2018.
As part of Monday’s deal to end the government shutdown, Congress delayed the Cadillac Tax by another two years.
Congress has officially passed H.R. 1, the Tax Cut and Jobs Act. After making a few last minute changes to accommodate Senate rules and procedures, Senate Republicans passed the bill Tuesday night along party lines, 51-48. Today, the House passed the bill with those changes by a vote of 224-201.
House Marks Up More Regulatory Reform Bills This Week
On February 14, the House Oversight and Government Reform Committee marked up a number of regulatory reform bills, including the "Searching for and Cutting Regulations that are Unnecessarily Burdensome (“SCRUB”) Act of 2017," the "Regulatory Integrity Act of 2017," and the "OIRA (“Office of Information and Regulatory Affairs”) Insight, Reform and Accountability Act." Meanwhile, more regulatory reform bills continue to be introduced in the House.  Read more by clicking on the link below.
President Obama Signs FAA Reauthorization BIll Into Law
On Friday, July 15, President Obama signed the "FAA Extension, Safety, and Security Act of 2016" (H.R. 636) into law, which extends Federal Aviation Administration (FAA) program, spending, and tax authorities through September 30, 2017 at current funding levels. The House passed the bill by voice vote on July 11 and the Senate passed the bill on July 13 by a vote of 89-4. The bill also provides important aviation safety, security, and time-sensitive improvements, including: improvements to the I-95 corridor in Northern Virginia.

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