TAUC Legislative and Regulatory Update, September 2018

September 5 2018

TAUC Legislative & Regulatory Update, September 2018

With the House out of town for its annual August recess, the Senate stayed in session to confirm Federal judges and continue working on FY 2019 appropriations bills. With the passage of three "mini-bus" appropriations bills, the Senate has now passed nine of the 12 annual appropriations bills. The last time that the Senate passed nine appropriations bills by the end of August was 1999. The House has passed six of its appropriations bills. The House and Senate are expected to try to conference as many of the bills as possible in an effort to avoid a continuing resolution (CR) before the end of the fiscal year on September 30th.

Despite these efforts, the fact that congress is only expected to be in session a total of 12 legislative days before the 30th means that a CR for some or all of the spending bills will be required to avoid a government shutdown. This effort is also complicated by Senator McConnell's desire to confirm Brett Kavanagh to replace retiring Supreme Court justice Anthony Kennedy this Fall. The process 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) continued to work on recommendations and legislation to address multiemployer pension plans and the PBGC. The provision establishing this JSC calls for bipartisan legislative recommendations to be approved by the Committee by Nov. 30th of this year to address this crisis. Despite the stated desire of Senators Hatch and Brown to have JSC staff use August to begin finalizing negotiations and develop a package of recommendations and policy options for members to consider and begin finalizing in September, this appears increasingly unlikely. JSC member staff continue to examine various options and policy changes, and are consulting with the PBGC and the Joint Tax Committee to understand how various policy changes could impact the multiemployer pension system.

TAUC continues to meet 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 which could have a significant impact on the current structure and operation of plans and costs paid by contributing employers, 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 withdraw liability and "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 health 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, and continues to advocate for the including of hybrid composite plans to provide trustees tools to strengthen existing plans.

Affordable Clean Energy Rule

The Trump administration released a new proposal to regulate carbon dioxide emissions from coal-fired power plants, replacing the Obama Administration's Clean Power Plan (CPP). While the proposed Affordable Clean Energy (ACE) rule does continue to have the Federal government regulate carbon dioxide emissions, the proposal does so without forcing major changes on the energy industry and will have far less impact on the nation's energy system than the CPP.

Specifically, ACE establishes emission guidelines for states to develop and submit plans to EPA addressing greenhouse gas (GHG) emissions from existing coal-fired power plants. In recommending that states develop plans to regulate the emissions of individual coal plants by improving efficiency and requiring utilization of technology to meet performance standards in state plans, ACE takes a very different approach than what was proposed under the CPP. While the CPP was stayed by the Supreme Court in 2016 and never went into effect, it would have required utilities to make broader systemic changes to cut emissions, such as switching from coal to natural gas or renewable energy sources. The EPA stated that approximately 600 coal-fired electric generating units at 300 facilities could be covered by this proposed rule, and projects that replacing the CPP with the ACE rule could result in $3.4 billion in net benefits.

EPA is accepting comment on the proposal for 60 days on the proposed rule. The agency will also hold a public hearing on the proposal.

Opioid Crisis Legislation

The Senate is working to finalize an agreement to take up a slate of bills to address the opioids crisis. Senators involved in the discussions hope to be able to reach an agreement to bring a consensus bill legislative package to the Floor in early September. According to Sen. Lamar Alexander, the Chairman of the Health, Education, Labor, and Pensions Committee, 70 senators and 4 committees have been engaged in these complicated discussions. The Senate hopes to be able to reach agreement shortly so that they can pass legislation and work out a final agreement with the House. The House passed its comprehensive legislative package of over 50 separate bills in July. A final package is expected to be approved and signed into law later this year.

Trade

Trade continues to be a hot topic in Washington DC, with the Trump Administration proceeding on multiple fronts to address the nation's trade deficit.

North American Free Trade Agreement (NAFTA) – President Trump recently notified Congress of his intent to sign a trade agreement with Mexico to replace the North American Free Trade Agreement (NAFTA). This starts a 90-day clock for the nations to sign a trade deal. The agreement does not include Canada at this point, but U.S. and Canadian negotiators will resume trade talks with the hopes of wrapping up a deal before the clock runs out. Without Canada, it is unlike a new North American trade deal would be approved by Congress. Regardless, it is not likely that the new trade pact would be considered until next year.

Automobile Tariffs – In response to the President's threats to impose tariffs on imported cars, the European Union, Mexico, and Japan have made efforts to reach an agreement with the U.S. to avoid tariffs. To date, these efforts have not lead to an agreement and the specter of tariffs has many in the auto industry concerned about the uncertainty in the market.

China Tariffs – The U.S. and China continue trade talks in an effort to end sanctions places on various goods imported from each country. To date, both countries have placed tariffs on $50 billion worth of good imported from the other Country. The U.S. has said that it will target tariffs on an additional $200 billion in goods imported from China. China has responded by identifying an additional $60 billion worth of American goods on which it plans to place tariffs.