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TAUC Legislative & Regulatory Update, August 2019
As Congress breaks for its annual summer recess, the stage is set for action this fall on several critical issues impacting the unionized construction and maintenance industry. The agreement between the President and Congressional leaders on raising the budget spending caps and suspending the debt ceiling will allow Congress to advance annual appropriations bills. And the House's passage of legislation to address the multiemployer pension crisis now shifts attention to the Senate – where a bipartisan comprehensive approach is being developed.
Here is an exclusive update from TAUC on policy and regulatory issues of vital interest to contractors and the union construction and maintenance industry as a whole.
Multiemployer Pension Reform
The House passed bipartisan legislation to address the looming multiemployer pension crisis with a mark-up of H.R. 397, the "Rehabilitation for Multiemployer Pensions Act" (the Butch Lewis Act). The bill would establish a new federal loan program to address failing multiemployer plans. The new program would make loans to a) multiemployer plans in critical and declining funded status that have been approved by the Department of Treasury to suspend benefits under MPRA prior to the enactment of this legislation, or b) to plans that are insolvent but not terminated. Plans seeking loans would have to demonstrate that the loan will enable the plan to avoid insolvency and can reasonably be expected to pay benefits and repay the principal in 30 years. The legislation does not include composite plans. The final vote on the bill was 264-169. While this legislation raises several concerns with TAUC and other signatory contractor organizations, it is an important first step towards enacting pension reform.
Action now moves to the Senate, where we are hopeful a comprehensive solution will be developed to address the crisis facing the multiemployer system. Key Senate staffers have said that H.R. 397 — in its current form — would not receive support from a majority of the Senate. Despite the lack of support in the Senate for the Butch Lewis Act, Sen. Sherrod Brown (D-OH) introduced identical legislation in the Senate on June 24th. We have been told that this legislation is not the endpoint for him or the other sponsors, and they will work with their colleagues on other measures. The Senate Finance Committee and the Senate Health, Education, Labor and Pension Committee are expected to work on crafting a bipartisan and more comprehensive proposal. Partition of the "orphans" (i.e. unfunded vested liabilities associated with withdrawn employers) and other tools to allow trustees to proactively manage plans appear to be central to the senate's discussions. This is also likely to include discussions related to the multiemployer premiums and plan funding requirements.
After House passage of H.R. 397, TAUC joined with over 100 building trade unions, contractor associations, pension plans, employers and employer organizations — including more than a dozen TAUC Local Employer Organization Committee members — in a letter to the leadership of both the House and Senate outlining our legislative priorities for what should be included in the final legislation addressing the multiemployer pension plan crisis. We also continue to work with the CEA, NCCMP, AGC, the U.S. Chamber of Commerce, and other employer groups to educate members of Congress about our pension reform priorities and the need for composite plans. You can read the letter here.
The House action follows a contentious Ways and Means Committee mark-up on the legislation — which resulted in the bill being sent to the floor by a party-line vote. During the mark-up, Republican members of the committee offered a number of amendments that were of serious concern to signatory contractors and could lead to significant increases in contributions to plan or PBGC premiums. These include proposals to: increase PBGC premiums; move towards a more risk-based premium; change plan funding rules; and lower the discount rate plans can used by plans. There were also amendments to remove plan trustees and replace them with independent trustees appointed by Treasury and to require plans receiving a loan to repay the loan if any participating employers have "excess compensation, dividends and redemptions." Many of these proposals were raised during the deliberations of the Joint Select Committee on the Solvency of Multiemployer Pension Plans, and we anticipate that several conceptions included in these amendments will be revisited during Senate consideration and/or efforts to reach a final agreement between the House and the Senate.
Trump Administration's Proposed Apprenticeship and Training Rule
TAUC continues to work ensure that the construction industries privately funded registered apprentice programs are not undermined by the Trump Administration's proposed rule to overhaul the nation's apprenticeship and training system and encourage the creation of apprentice training programs across a wide variety of industry sectors.
We are working closely with NABTU, the CEA and other union contractor associations to ensure that the proposal's new "Industry Recognized Apprenticeship Program" (IRAPs) component does not apply to the construction industry – which currently accounts for 48 percent of all registered apprenticeship and training programs. These new IRAPs are designed to work outside of the existing registered apprenticeship system and provide greater flexibility. IRAPs would also allow employers to design and certify their own federally assisted training programs with minimal government oversight. This raises serious concerns with contributing employers to construction industry apprenticeship and training plans — namely, that the new programs would lack sufficient government oversight and training standards and would ultimately undermine existing privately funded registered apprenticeship programs.
The proposed rule states that the DOL would not, "at least initially," accept applications to recognize IRAPs in the construction industry; however, it is not clear that DOL would not consider construction industry IRAPs in the future. TAUC and our allies believe that there should be no IRAPs in the construction industry.
Comments on the NPRM are due August 26, 2019. We encourage all TAUC members to submit comments on the proposed rule and will soon be providing resources to assist in this process.
Please see TAUC's Apprenticeship Rule Resource Page for additional information on the proposed rule. We are also utilizing a new EmpowerMe tool to help facilitate submission of comments. The website can be found here: www.ProtectConstructionTraining.org.
We have also been working with our colleagues in the CEA to encourage Republican members of Congress to sign on to a letter urging the administration not to undermine registered apprenticeship programs. The effort was led by Congressman David McKinley of West Virginia. There are currently 25 members who have signed on to the letter.
The Environment and Public Works Committee (EPW) has approved the highway and bridge portion of the reauthorization of federal highway and transit programs. The five-year, $287-billion package is a 27 percent increase over the most recent surface transportation reauthorization. EPW is responsible for the highway and highway bridge portion of the bill. The Senate Commerce and Banking committees also must act on their portions of the bill, and the Finance Committee will have to identify the additional Highway Trust Funds revenues necessary to provide for the investment levels called for in the bill. There is no timetable for action in these committees or by the full Senate. The House does not plan to consider surface transportation legislation until early next year. The current surface transportation authorization – the Fixing Americas Surface Transportation Act (FAST Act) – does not expire until September 30, 2020.
OSHA Heat Illness Prevention Standard
On July 11, the House Education and Labor Committee's Subcommittee on Workforce Protections held a hearing on preventing workforce injuries and illness from excessive heat. The hearing specifically focused on H.R. 3668, the "Asuncion Valdivia Heat Illness and Fatality Prevention Act of 2019", which would require OSHA to establish a standard for workplace heat-related injuries and illnesses.
Under this legislation, OSHA would be required to introduce a proposed standard on the prevention of occupational exposure to excessive heat within two years from the date of enactment of the legislation and issue a final standard within 42 months of that same date. The bill would require the final standard provide no less protection than the most protective heat prevention standard adopted by an OSHA state-level plan. The legislation would also require employers to develop, implement, and maintain heat illness prevention plans for covered employees, which must be tailored specifically to hazards in the workplace, once the final standard was adopted.
TAUC is joining a letter to the subcommittee organized by the Construction Industry Safety Coalition ("CISC") expressing concerns with the legislation. While the organizations generally share the goals of the legislation, CISC members have significant concerns with the approach taken in the legislation to accomplish these goals. Specifically, the organizations are concerned that the standard would be too prescriptive, would fail to account for the numerous factors to consider when determining at what point or under what conditions the potential for "heat" becomes a hazard, and does not recognize the transient nature of the union construction industry.