TAUC Legislative and Regulatory Update, August 2018

August 8 2018

TAUC Legislative & Regulatory Update, August 2018

The House has left Washington for its annual August Recess. The Senate is planning to stay in town for most of the month to continue working on confirming Federal judges and Fiscal Year 2019 appropriations bills. It is also possible that the Senate could take up water infrastructure and Federal Aviation Administration reauthorization legislation this month. The Senate is also girding for a battle over the consideration and confirmation of Brett Kavanagh to replace retiring Supreme Court justice Anthony Kennedy, something that will consume much of the Senate’s agenda prior to the mid-term elections.

Here is an exclusive update from TAUC on policy and regulatory issues of vital interest to contractors and the union construction and maintenance industry.

Multiemployer Pensions

The Joint Select Committee on the Solvency of Multiemployer Pension Plans (JSC) has held two hearings since we last reported. The Committee is continuing to work on recommendations and legislation to address multiemployer pension plans and the PBGC. Bipartisan legislative recommendations need to be approved by the JSC by Nov. 30th of this year to address this crisis.

The JSC held a field hearing in Columbus, Ohio to examine the impact of the looming multiemployer pension crisis on current workers and retirees. At the hearing, the committee heard from businesses that are contributing employers in critical status pension plans, as well as union members and retirees, to provide perspective of the real-world context on pension issues and the consequences of inaction. The business witnesses spoke about the risks to their businesses and the jobs they provide if the pension plans they participate in become insolvent.

The Committee also held a hearing to consider how the multiemployer pension system affects stakeholders. At the hearing, the JSC heard from a retiree in the Central States’ plan, academics, and a plan “practitioner” to explore the impact of the looming crisis on various stakeholders involved in the multiemployer system. Members discussed a timeline for trying to achieve a bipartisan proposal by the statutory deadline. Staff for JSC members will continue meeting during August and develop policy options to consider at a members’ meeting in September.

To address this looming crisis, the JSC is taking a broad look at policies to reform the multiemployer system. Many policy items raised by members in JSC hearings and under consideration could have a significant impact on existing plans and contributing employers. TAUC has been meeting regularly with staff for members of the JSC to ensure that the perspectives and needs of contributing employers are reflected in the deliberations. Issues and policy changes being discussed could have a significant impact on the current structure and operation of plans and costs paid by contributing employers, and include: structure and roles of trustees; changes to the PBGC premium structure (including the possibility of significant premium increases); requiring plans to use and adhere to more conservative and stricter funding standards; and changes to bankruptcy laws. The JSC has also been examining potential changes to withdrawal liability and the “last man standing” rule, as well as authorizing the use of hybrid composite plans as a voluntary means of providing plans options and flexibility to remain healthy into the future.

TAUC, CEA, NCCMP and others have been communicating our concerns to JSC members that some of these proposed policies under consideration could lead to a much greater pension crisis than the one that already exists. We are advocating for provisions – like composite plans – that would provide trustees tools to strengthen plans.

The Joint Select Committee is accepting comments from the general public online at: https://www.pensions.senate.gov/. This provides an opportunity for TAUC members to communicate with the Committee over the realities they face as contributing employers to multiemployer pension plans. We encourage TAUC members to submit comments to tell your story and the impact that a failure to act would have on your businesses and employees.

Apprenticeship

Over the past month, there has been a lot of activity related to policies to expand and modernize apprenticeship training programs. There was a roundtable held by the House Apprenticeship Caucus; a hearing in the Senate Heath, Education, Labor, and Pension (HELP) Committee; and a White House meeting hosted by the President. Each of these events were designed to explore options for addressing the workforce shortages by expanding and “modernizing” the current approach to apprenticeships.

At the White House event, the President signed an Executive Order establishing the “President’s National Council for the American Worker.” The Council membership is exclusively made up of government officials and is charged with examining how Congress and the Executive Branch can work with stakeholders to support the implementation of recommendations from the Task Force on Apprenticeship Expansion that DOL rolled out earlier this summer. A key aspect of that report was the establishment of the new “Industry Recognized Apprenticeships” (IRAs). These new programs are designed to work outside of the current registered apprenticeship system. The report is the first step in what is anticipated to be an ongoing effort to develop and implement policies to expand apprenticeships and training opportunities.

Organizations like the Associated Builders and Contractors (ABC) have used these forums to promote IRAs and providing Federal funding for training programs as a means of providing greater flexibility and eliminating the “burdens” of the existing registered apprenticeship programs. TAUC has been working closely with CEA partners, the North America’s Building Trades Unions (NABTU) and its affiliates to aggressively push back on policy changes and recommendations that undermine the existing employer-sponsored registered apprenticeship system or provide federal funding to subsidize construction industry training programs in order to “modernize” apprenticeships.

Read the letter TAUC sent to the HELP Committee in advance of its July 26 hearing that addresses these and other apprenticeship issues.

Opioid Crisis

While the Senate plans to remain in Washington for most of August, it does not appear likely that opioid legislation will be considered by the full Senate. The Senate Health, Education, Labor and Pensions (HELP) Committee approved a package of bills focused on expanding access to treatment and prevention, as well as cracking down on distribution of the drugs. The legislation has been waiting for a floor vote since it was unanimously approved by the HELP Committee in April of this year. Last month the House of Representatives passed H.R. 6, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act. The bipartisan legislative package bundles together over fifty bills related to the opioid crisis.

While timing remains uncertain, a final package is expected to be approved and signed into law later this year.

Shuster Infrastructure Proposal

House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA) unveiled his plan to address the structural deficiencies in the Highway Trust Fund (HTF) and increase infrastructure investment.

The plan proposes to increase federal user fees on gas by 15 cents per gallon and on diesel by 20 cents per gallon over the next three years. Following that, the user fees would be indexed to inflation before being zeroed out in 2028. The gas tax, which is currently 18.4 cents per gallon (diesel is 24.4 cents per gallon), is not currently indexed to inflation and hasn’t been raised since 1993. The plan proposes to place a 10 percent tax on electric car batteries and a 10 percent tax on bicycle tires. The plan would also eliminate the 17-cent partial fuel tax exemption for some buses and place a 4.3 cent per gallon tax on diesel used by some passenger trains. If revenues available for the HTF do not increase, the Congressional Budget Office (CBO) estimates the Highway Trust Fund (HTF) will be insolvent by 2020. Once the user fees on gas and diesel are zeroed out in 2028, they would be replaced with corresponding increases in similar user fees on alternative fuels.

The plan is unlikely to be considered this Congress. Shuster, who is retiring at the end of this session, stated that the proposal is meant to reignite discussions amongst Federal policymakers about infrastructure.