TAUC Legislative and Regulatory Update, October 2017

October 3 2017

TAUC Legislative & Regulatory Update – October 2017

Yet another full-blown battle over ACA repeal effort has come and gone after the Graham-Cassidy proposal to block-grant health care funding and programs to the states failed to get the necessary 50 votes in the Senate. The GOP promised to revisit the issue at some point in the future. With the collapse of the latest ACA-repeal effort, attention is shifting to tax reform, which is expected to dominate most of the legislative activity this Fall.

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

Anti-Davis-Bacon and Project Labor Agreement Attacks

TAUC, along with our labor and union contractor association allies, were once again successful in defeating six anti-Project Labor Agreement and anti-Davis-Bacon amendments during the House’s consideration of H.R. 3354, the “Make America Secure and Prosperous Appropriations Act, 2018.” TAUC actively worked against the amendment and sent letters to each member of Congress opposing these amendments. Our efforts were made in close coordination with the Congressional Building Trades Caucus, the Construction Employers of America, and the North American Building Trades Unions to fight these attacks.

Tax Reform

As mentioned earlier, momentum is building for the first overhaul of the nation’s tax code since the Tax Reform Act of 1986. While there is significant interest in doing tax reform, passage of such legislation is a heavy lift. But with Republicans in control of the House and Senate and the Trump Administration eager to sign legislation providing tax relief for American families and businesses, we’re approaching a moment of time where what is normally viewed as impossible MAY be possible. The devil will be in the details.

TAUC has joined with other members of the Construction Employers of America in writing to the Congressional tax-writing committees to advocate for the inclusion of policies that support and strengthen the competitive position of signatory contractors. These include: lowering the corporate tax rate and ensuring equitable treatment of S-Corporation and C-Corporations; cracking down on employee misclassification/payroll fraud; and the deductibility of employer-provided health insurance. The CEA also urged the preservation and/or consideration of tax policies that can drive infrastructure investment. ‘

Multiemployer Pension Reform

TAUC and other contractor associations continue to work on multiemployer pension reforms – specifically, the authorization of hybrid composite plans. We are hopeful legislation could be considered in the context of tax reform or the end-of-year appropriations bill, and have been meeting with the bipartisan members of the House Ways and Means Committee and the House Education and Workforce Committee (the congressional committees with jurisdiction over multiemployer pension plans), as well as Congressional leadership, urging consideration of legislation authorizing composite plans.

This effort has been made more complicated due to blowback from the 2014 MPRA legislation and efforts to authorize significant federal loan programs proposed by UPS, the Teamsters, and the United Mineworkers that are designed to address highly distressed plans.

We are also facing opposition to composite plans from the Teamsters, Steelworkers, Machinists and other pension rights advocates. We are hopeful that freestanding legislation authorizing composite plans will be introduced soon so we can actively promote it and encourage members of Congress to support its inclusion in any legislation containing multiemployer pension provisions.

In related pension news, the participants in the New York State Teamsters Conference Pension and Retirement Fund voted to approve a rescue plan under MPRA. The plan includes a 30% benefit reduction. The rescue plan is one of three that has been approved by the U.S. Department of Treasury since the enactment of MPRA. An additional four plans are currently under review at the Department.

Infrastructure Package

The Administration continues to work on one of President Trump’s stated priorities – a significant infrastructure investment package. So far, few specific details have been made public. Generally, the administration has continued to indicate that the proposal will significantly shorten the Federal environmental review and permitting process and include $200 billion in actual federal funding intended to leverage $800 billion in additional spending.

The Administration is saying that it plans to move forward with an infrastructure bill after it completes work on tax reform. The infrastructure package will likely include 3 areas of federal funding – a $100-billion discretionary grant program designed to leverage nonfederal funding, $50 billion in funding for rural projects, and $50 billion in funding for innovative projects unlikely to attract private investment.

Steel Tariffs

Another agenda item that is delayed until after tax reform is a final decision on steel tariffs. Earlier this year, the President issued an E.O. instructing the Secretary of Commerce to launch a special investigation under section 232 of the 1962 Trade Expansion Act to determine if unfair trade practices by foreign steel and aluminum producers constitute a threat to national security. If such a threat is found, emergency trade sanctions can be imposed on “national security” grounds. Commerce Secretary Wilbur Ross said the Administration decided to defer a decision on steel tariffs until after Congress considers tax reform.

Silica Rule

The Occupational Safety and Health Administration (OSHA) announced that for the first 30 days of the new standard for crystalline silica exposure, it will consider whether employers are making “good faith” efforts to meet the new standard before issuing a citation. The new standard, which took effect on September 23, sets a limit of 50 micrograms per cubic meter of air, averaged over an eight-hour shift, compared to the previous level of 250 micrograms for the construction industry.

TAUC has joined other construction industry organizations in challenging the standard in federal court, questioning that the new standard is based on flawed science and unrealistic assumptions about the construction industry and could divert significant resources–human and financial–away from activities aimed at mitigating, if not eliminating, documented, serious hazards to workers’ health and safety.

Environmental Regulations

There continues to be a lot of activity on the environmental regulation front as the Trump Administration reconsiders several actions taken under President Obama:

Waters of the U.S.: The EPA has received more than 190,000 comments on its proposal for the EPA and the Army Corps of Engineers to replace the Obama-era rule defining the rivers, streams and wetlands that fall under the Clean Water Act, the so-called “Waters of the U.S.” rule.

Clean Power Plan: The EPA is also expected to begin an effort to undo the Clean Power Plan this fall. The Obama administration regulation set greenhouse gas standards for existing power plants, currently on hold under a stay from the U.S. Supreme Court as litigation against the rule is considered. According to the EPA, the rulemaking currently being reviewed by the White House Office of Management and Budget proposes to withdraw the Clean Power Plan on grounds that it exceeds the statutory authority provided under Section 111 of the Clean Air Act. It is not clear if the EPA intends to replace the Clean Power Plan with a narrower rule.

Ozone Standards: The EPA missed a compliance deadline for implementation of the 2015 ground-level tightened ozone standard set by the Obama Administration. The “attainment designations” are a key step towards implementing the tighter standard because they show which parts of the U.S. meet the 2015 ozone standard and which don’t, and they start the clock for out-of-compliance areas to come up with cleanup plans.

EPA has reported that it has sent a related regulation to the OMB for review. The regulation will “establish the air quality thresholds that define the classifications assigned to all nonattainment areas” for the 2015 standard. As a first step in the implementation process, states sent their attainment recommendations to EPA last fall; under a standard timetable, the agency was supposed to make final determinations by Oct. 1.

This is the latest in a legal and regulatory jockeying over the lower Ozone standard. In June, EPA Administrator Pruitt ordered a one-year extension for those decisions until October 2018, citing the need for more information. Pruitt reversed that decision in the face of law suits from state attorneys general. EPA has left open the possibility of providing “additional relief,” but has not taken additional steps as of this point.