TAUC Legislative & Regulatory Update, March 2020

March 3 2020

TAUC Legislative & Regulatory Update, March 2020

As Congress begins working on its post-impeachment legislative agenda in what is expected to be a difficult election year, we continue to monitor a number of important policy and regulatory issues that could have a significant impact on the union construction and maintenance industry. We remain hopeful that multiemployer pension legislation – including the authorization of composite plans – can pass this Congress. We are also expecting legislative activity on infrastructure and energy legislation, as well as a fair amount of election year posturing. Here is an exclusive update from TAUC on policy and regulatory issues of vital interest to contractors and the union construction and maintenance industry.

***UPDATE 3/10*** DOL Releases Final Apprenticeship Rule

The Department of Labor on March 10 released the Final Rule on the "Industry-Recognized Apprenticeship Programs" and TAUC is very pleased to see the construction industry exemption was included.  Two sections worth highlighting are:

• "The vast majority of the 326,000 comments received by the Department addressed this section of the proposed rule, with many calling for an express exclusion of construction from the final rule. After reviewing and analyzing the comments on this section, the Department has determined that a complete exclusion of construction, but no other sector, is most consistent with the goal of encouraging more apprenticeships in new industry sectors that lack widespread and well established registered apprenticeship opportunities."
• "Administrator will not recognize as SREs entities that intend to recognize as IRAPs programs that seek to train apprentices to perform construction activities, consisting of: the erecting of buildings and other structures (including additions); heavy construction other than buildings; and alterations, reconstruction, installation, and maintenance and repairs."

For more information, check out:

• TAUC Statement on DOL Final Rule
• NABTU Statement on Final IRAP Rule

PRO Act

The House passed H.R. 2474, the "Protecting the Right to Organize Act" (PRO Act) with a bipartisan vote of 224-194. As we reported last month, this legislation would make significant changes to dozens of labor laws to assist union organizing efforts. Changes in the bill to existing labor law include:

• Authorizes "card check" organizing;
• Repeals restrictions on secondary boycotts and common-situs picketing;
• Allow intermittent strikes;
• Imposes mediation and binding arbitration;
• Establishes joint employer status change could alter well-settled subcontracting practices in the construction industry; and
• Grants the NLRB the power to levy civil fines on employers that violate labor law.

The bill also includes provisions designed to address employee misclassification, by establishing a new "ABC" test for determining independent contractor status. The bill is very unlikely to be considered in the Senate.
 

Infrastructure

There continues to be a lot of activity on infrastructure, including discussions of advancing federal surface transportation reauthorization legislation. House Democrats and the Trump Administration have both proposed significant infrastructure investment packages and the Senate Republicans continue to pursue surface transportation legislation. Despite this activity, neither the House, Senate, nor the Administration have spelled out specifically how they propose to pay for increased infrastructure investment. This remains the primary impediment to advancing infrastructure reauthorization.

House Democrats: As we reported last month, the House Democrats unveiled an outline of their infrastructure package, which would provide $760 billion over five years to invest in roads, transit, rail, aviation, broadband, wastewater, and drinking water infrastructure. This package included $434 billion for the reauthorization of Federal highway and highway bridge, public transportation, and highway and motor carrier programs under the "Fixing American's Surface Transportation Act" (FAST Act), which expires on September 30, 2020. It also includes:

• $50.5 billion to build new clean water and wastewater infrastructure;
• $10 billion to addresses the impact of severe weather events by addressing the backlog of Army Corps projects;
• 19.7 billion for dredging and upkeep of harbors, ports and channels;
• $86 Billion to expand broadband access;
• $34.3 billion for "clean energy" improvements;
• $30 billion for airport infrastructure modernization and capacity improvements; and
• $25.4 Billion for safe drinking water infrastructure investments.

Senate Surface Transportation Reauthorization: While the House has proposed a broad infrastructure investment package, the Senate continues to attempt to advance a surface transportation reauthorization proposal. The Senate EPW Committee advanced a five-year surface transportation reauthorization bill, the "America's Transportation Infrastructure Act" (ATIA), last summer. ATIA would authorize $287.3 billion in surface transportation investment, a 27 percent increase in Federal aid highway funding. As with the House proposal, the bill does not include any revenue increases or pay-fors.

According to the Congressional Budget Office (CBO), the HTF – which funds federal highway and public transportation programs authorized under the FAST Act – will require an additional $102 billion in revenues to support the surface transportation levels called for in the EPW Committee's bill. Despite this challenge, the Senate could attempt to move on EPW Committee's surface transportation bill. It has been widely reported that Senate Majority Leader Mitch McConnell is considering moving the EPW bill as part of the Senate's post-impeachment election year agenda.

White House: Despite the President's public endorsement of the Senate EPW Committee's bill, his Fiscal Year (FY) 2021 Budget Request also included a $1 trillion infrastructure proposal. The package proposes a 10-year, $810 billion reauthorization of surface transportation programs and a one-time $190 billion investment in FY21 for various infrastructure projects. The $810 billion reauthorization is a 12 percent increase over baseline of current transportation funding.

While few details have been released about the $190 billion in mandatory spending for FY21, the White House has released a fact sheet indicating how the funds will be broken down:

• $60 billion for a new 'Building Infrastructure Great' grant program to fund mega-projects across a variety of modes including "surface transportation, road, bridge, rail, transit, pipeline, landside port, and intermodal connection capital investments; lock, dam, and canal investments; drinking water and waste treatment capital investments; and energy and broadband capital investments."
• $50 billion for a new 'Moving America's Freight Safely and Efficiently' program that will provide both formula and discretionary funding to address bottlenecks and improve safety.
• $35 billion for a new 'Bridge Rebuilding' program to invest in critical bridge infrastructure. $12 billion will be distributed through formula for 'off-system' bridges and $23 billion will be distrusted through a competitive process for larger bridges.
• $25 billion for a new 'Revitalizing Rural America' program that will invest in a variety of rural infrastructure projects including broadband, transportation, and water. The funding will be distributed via formula to States, tribes, and territories and additional competitive grants will be distributed "based on the boldness of locally-developed investment and performance plans."
• $20 billion for a 'Transit State of Good Repair Sprint' program which will provide funding for transit maintenance. No new capacity projects will be funded through this program.

The infrastructure package proposed in the budget does not include any kind of pay-for and is projected to create a $261 billion HTF shortfall by the end of FY 2030.
 

Energy, Carbon Capture and Climate Legislation

While the future of infrastructure legislation remains somewhat unclear, there has been a lot of discussions about advancing energy-related legislation through congress in the near term.

Bipartisan Senate Energy Bill: Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) and ranking member Joe Manchin (D-W.Va.) released a bipartisan energy package which will be considered on the Senate Floor the week of March 2nd. The American Energy Innovation Act energy package more than 50 energy-related measures passed by the Energy Committee and contains provisions on Department of Energy clean energy technologies research and development, critical minerals, and efficiency. The package is designed to bill boost federal support for a range of energy sources to "strengthen the domestic economy, national security, and international competitiveness while facilitating cleaner energy that protects human health and the global environment." The proposal does not include an overall target or any economy-wide mechanism, such as a carbon price or a mandate, to reduce emissions.

Carbon Capture Legislation: The energy package could also be a vehicle for carbon capture legislation. There have been several bills introduced that would provide support and incentives for developing carbon capture technology and facilities for storing carbon dioxide underground. The legislation would provide federal support to overcome the financial and technical risks of investing in carbon capture technology, which is still in the early stages of development. The energy package will likely include the Enhancing Fossil Fuel Energy Carbon Technology Act (S. 1201), backed by Murkowski and Manchin (D-W.Va.). This bill would direct the DOE to support coal and natural gas demonstration projects including large-scale carbon sequestration technologies.

The Utilizing Significant Emissions with Innovative Technologies (USE IT) Act, which was initially attached to the Senate's fiscal 2020 defense bill but dropped during final negotiations on that package, is also likely to be considered during Senate action. The legislation, which has bipartisan support in both the House and Senate and the support of some environmental organizations, would accelerate research on technologies that pull carbon dioxide from the ambient air and store it underground or in commercial products, including steel and other building materials.

There is also a possibility of some version of carbon capture legislation moving in the House. The House Energy and Commerce Committee held a hearing earlier this month on the bipartisan House version (H.R. 1166) of the USE IT Act. Committee leaders have signed a willingness to engage with the Senate on the concepts as part of a larger package of related climate bills. The USE IT Act was also part of a GOP climate bill package unveiled by House Minority Leader Kevin McCarthy (R-Calif.).

House Draft Climate Legislation: The House Energy and Commerce Committee Democrats are working on draft legislation – the "CLEAN Future Act" — to provide approximately $316 billion over 10 years to help the country reach net-zero emissions by 2050. The spending would come through new programs within the Department of Energy and EPA, as well as the reauthorization and expansion of a number of existing programs at those agencies. The discussion draft lays out its policy goals in its efforts to address climate change and where federal investment could help achieve that effort.

The package would include $75 billion over 10-years for electric vehicle-related infrastructure grants, rebate programs and retrofit programs; approximately $57 billion for energy efficiency programs — including state block grants, low-income weatherization programs, and public buildings and school retrofit programs; and $2.3 billion annually through fiscal year 2024 for a new commercialization program for carbon capture and storage.

The proposal does not include a specific funding levels for assisting state and local government and the private sector in meeting its policy goal of eliminating emissions in the power sector — a clean electricity standard. It would require the establishment of a system of clean energy credit trading on retail electricity providers, administered through DOE, ramping up to a requirement for 100% clean energy by 2050. The requirement would generate revenue via compliance fees for companies that cannot meet targets and civil penalties in certain cases to provide funding to the states through a new carbon mitigation program to fund activities to improve energy efficiency and decarbonizing government vehicle fleets.