TAUC Legislative & Regulatory Update, June 2020
Leaders in the House and Senate continue to develop legislation to respond to the public health and economic fallout caused by COVID-19. The House has passed a $3 trillion "Phase 4" response package known as the HEROES Act, which features significant multiemployer relief and reforms, including authorizing the use of composite plans. The House also passed legislation making the small business relief program – the Paycheck Protection Program (PPP) – easier for firms to utilize.
Senate Majority Leader Mitch McConnell (R-KY) has stated that the Senate plans to wait to respond to the House package until later this summer once the magnitude of the economic impact is better understood. However, he does anticipate scheduling and passing the PPP legislation very soon.
TAUC continues to work with member contractors and several of our building trades union partners to ensure composite plans make it into the final COVID-response package. Meanwhile, here is an exclusive update on policy and regulatory issues of vital interest to contractors and the union construction and maintenance industry.
As noted above, the House-passed HEROES Act (H.R. 6800) included significant multiemployer pension relief and reforms – specifically, a special partition program to allow the PBGC to rescue failing multiemployer pension plans. The legislation also includes the GROW Act, which authorizations the voluntary use of hybrid composite plans. The provisions included in the bill will address the immediate need to rescue failing plans (which have been further weakened by the economic fallout due to COVID-19) and also implement important reforms that will provide trustees an additional tool (composites) to ensure that otherwise healthy plans remain solvent for the long-term.
The HEROES Act provisions are similar to those included in a white paper developed late last year by Senators Chuck Grassley (R-IA) and Lamar Alexander (R-TN); both will take the lead on any pension legislation developed in the Senate.
Last month, TAUC joined with construction contractor trade associations to send a letter to Congressional leaders urging them to pass multiemployer pension reforms – including composite plans – in any COVID-19 response package.
TAUC has also been working closely with NCCMP, other contractor associations and a number of building and construction trades unions to ensure that the final COVID response package includes the GROW Act. We also partnered with contractor associations to commission a study that found composite retirement plans would have fared better during the coronavirus pandemic and related market declines than traditional defined-benefit multi-employer plans. The study highlighted that employees and employers will benefit if Congress authorizes the use of composite plans. (READ THE STUDY HERE)
Paycheck Protection Flexibility Act
As mentioned earlier, this month the House passed legislation (H.R. 7010) amending the Paycheck Protection Program (PPP) for small businesses. The PPP was created prevent job losses and negative financial impacts on employers. The program has been somewhat limited in its application; the new bill would address this by easing restrictions on recipients' use of loans and enabling additional loan forgiveness. Specifically, the legislation would extend the expense forgiveness period from eight weeks to twenty-four weeks; reduce the minimum amount that must be spent on payroll to 60 percent from 75 percent; allow payroll tax deferment for PPP recipients; and extend the June 30 deadline to rehire employees to December 31, 2020. Senate Majority Leader McConnell (R-KY) has signaled that the Senate may soon begin consideration of this legislation.
OSHA's Response to COVID-19
OSHA has issued two new enforcement guidances for employers related to COVID-19. The first is related to the recording of COVID-19 cases and the other deals with the agency's plans for onsite inspections. Both are limited to the duration of the current COVID-19 public health crisis.
Under the guidance, employers must record a case if the employee's illness is diagnosed as COVID-19 as defined by the Centers for Disease Control and Prevention (CDC); is work related; and meets one or more of OSHA's general recording criteria — death, days away from work, restricted work or transfer to another job, medical treatment beyond first aid, loss of consciousness or a diagnosis considered significant by a physician or other health care professional. OSHA acknowledged that it could be difficult to determine whether employees diagnosed with COVID-19 were exposed at work or elsewhere, so the agency provided additional information on how employers should approach that determination.
The other guidance stated that in areas of the country that are reopening, OSHA plans to return to its pre-pandemic inspection policy but that it will continue to prioritize coronavirus cases. In areas still experiencing high levels of COVID-19 cases, OSHA will continue to prioritize high-risk workplaces for onsite inspections.
Final Rule on Section 401 of the Clean Water Act
The U.S. Environmental Protection Agency (EPA) issued a final rule that will facilitate the construction of energy infrastructure. The rule would clarify the intent of Section 401 of the Clean Water Act to put in place clear guidelines that give these projects a path forward, and prevent states from using the Clean Water Act to delay the permitting and construction of energy infrastructure projects.
Specifically, the rule would establish statutory and regulatory timelines for review and action on a Section 401 certification, requiring final action to be taken within one year of receiving a certification request. The rule also clarifies the scope of Section 401, including establishing that the certification is only triggered based on the potential for a project to result in a discharge from a point source into a water of the United States. This will limit states from looking at issues other than the direct impact on water quality, which go beyond the scope of the Clean Water Act.
Treasury's Proposed Rule on Tax Credits for Carbon Capture and Storage
The Department of Treasury issued a proposed rule to expand a tax credit for companies that capture and store carbon dioxide, potentially facilitating additional domestic energy production. The proposed rule would allow the IRS to recapture the credits because of leakage from the storage facility for up to five years after the tax breaks are claimed.
The rules would also set standards for companies to prove that they have truly captured and stored carbon pollutants and are therefore eligible. The Carbon Capture Coalition estimates that once finalized, the certainty provided by this rule will allow nearly 30 commercial carbon capture projects already under development nationwide to move forward.