The D.C. Download, July 2022

July 19 2022

Government, Legislative Affairs, TAUC News

In this month’s issue of the D.C. Download we cover the PBGC’s Final Rule on Multiemployer Pension Funding, Budget Reconciliation and Clean Energy Tax Credits, Prevailing Wage Coverage, a recent Supreme Court ruling that limits the EPA’s Authority to control greenhouse emissions.

PBGC Issues Final Rule on Multiemployer Pension Funding

The Pension Benefit Guaranty Corporation (PBGC) issued final guidance in the Federal Register relating to funding provided by the American Rescue Plan Act of 2021 (ARP). ARP included $94 billion for underfunded multiemployer pension plans through the Special Financial Assistance (SFA) Program.

Last July, PBGC released interim guidance, which raised concerns due to limited investment requirements for plans receiving SFA. TAUC submitted comments to the PBGC raising questions about the investment restrictions on SFA funds and the discount rate assumptions plans would have to use. We also expressed concerns about how PBGC will apply requirements of the law to the merger of failing plans into healthy plans and whether this would undermine the intent of the legislation by discouraging mergers.

The final rule made significant changes to the interim final rule and loosens investment restrictions on plans receiving SPA funds. Specifically, it would allow plans to use of two different rates of return for SFA and non-SFA assets. It provides trustees flexibility in how they investment SPA funds, allowing 33 percent of SFA funds to be invested in “return-seeking assets”. The remaining 67 percent of SFA funds must be invested in investment-grade fixed-income products.

The final rule also addresses concerns raise with restrictions placed on SFA plans that merge into healthy plans. Specifically, the rule clarifies that the conditions relating to benefit increases and allocation of assets and administrative expenses do not apply to the merged plan. Merged plan may seek waivers from PBGC for restrictions and conditions that continue to apply.

The final rule will become effective on August 8, 2022.

Budget Reconciliation and Clean Energy Tax Credits

The White House and Senate Democratic leaders have continued negotiations Senator Joe Manchin (D-WV) to secure the votes needed to pass a significant legislative package through the expedited reconciliation process. Discussions were focused on drug pricing reform, clean energy investment and tax increases on high-income earners dedicated to deficit reduction.

While details are not publicly available, Manchin initially signaled a willingness to working towards a $300 billion limit on climate-related provisions to incentivize development of clean energy. Alternative energy tax incentives, which have been previously supported by TAUC, were part of the discussions. Despite the progress, Manchin has told Senate Majority Leader Schumer (D-NY) that he would support a reconciliation package with climate measures – this includes the clean energy tax credits.

Prevailing Wage Coverage in U.S. Innovation and Competition Act and America COMPETES Act

TAUC continues to support the passage of a competition bill designed to boost domestic chip manufacturing. Both the House and Senate have passed versions of legislation providing tax incentives to build domestic semiconductor manufacturing capacity and ensure that work undertaken utilizing these incentives are covered by Davis-Bacon prevailing wage protections.

While the House and Senate are currently in conference attempting to resolve the difference between their respective versions of the bill, Senate Minority Leader McConnell (R-KY) signaled that he will block consideration of the package if Democrats continue to pursue a budget reconciliation package. This has stalled negotiations and raise doubts as to whether this package can be finalized despite being a priority for the Biden Administration and having strong bipartisan support in congress.

FY23 House Labor Spending Bill

On Thursday, June 30th, the House Appropriations Committee approved the Labor, Health and Human Services, Education, and Related Agencies Funding Bill for Fiscal Year 2023 (FY23). The bill includes a $15 billion appropriation for DOL, representing a $1.9 billion increase relative to FY22.

The bill includes:

• $11.8 billion for the Employment and Training Administration, an increase of $1.3 billion above the FY 2022 enacted level and $193.7 million above the President’s budget request. Within this amount, the bill includes:
  • $3.1 billion for Workforce Innovation and Opportunity Act State Grants ($256 million above the FY 2022); and
  • $303 million for Registered Apprenticeships ($68 million above the FY 2022).
• $2.2 billion for Worker Protection Agencies, an increase of $347 million above the FY 2022 enacted level. Within this amount, the bill includes:
  • $313 million for the Wage and Hour Division ($62 million above the FY 2022); and
  • $712 million for the Occupational Safety and Health Administration ($100 million above the FY 2022).

While the House is poised to vote on a full appropriations package later this month, the Senate has not approved any of its spending measures. Additionally, the “four corners” – the Chairs and Ranking Members of the House and Senate Appropriations Committees – have yet to come to agreement on topline spending figures. These factors indicate that Congress will have

to adopt a continuing resolution (CR) at the end of the fiscal year to avoid a government shutdown.

Supreme Court Ruling Limits EPA Authority

The Supreme Court ruled that the Environmental Protection Agency (EPA) does not have the authority to make broad regulatory decisions to control greenhouse emissions from power plants under the authority of the Clean Air Act. For example, the decision precludes EPA from standing up a cap-and-trade regime. While the West Virginia V. EPA ruling did not completely eliminate EPA authority to regulate carbon emissions, it makes strict climate and environmental protection less likely. The specific case involved an Obama administration action that hampered coal-fired power plants, which the state of West Virginia opposed. Legal analysts believe the precedent set could curtail executive agency activity more broadly.

OSHA To Lower Threshold for Worker Toxic Lead Exposure

On Tuesday, June 28th, the Occupational Safety and Health Administration (OSHA) issued an Advance Notice of Proposed Rule Making (ANPRM) and request for comment in the Federal Register relating to its blood lead level for medical removal standards. The ANPRM discusses how recent findings reveal current OSHA general industry and construction Blood Lead Level (BLL) maximum standards are higher than the medical threshold for adverse health effects.

The ANPRM also notes state-level OSHA standard revisions or revision recommendations in Michigan, California, and Washington. OSHA is currently seeking public input on:

• Blood lead level triggers for medical removal protection
• Medical surveillance provisions, including triggers and frequency of blood lead monitoring
• Permissible exposure limits
• Ancillary provisions for personal protective equipment, housekeeping, hygiene and training
• Employer practices to address workplace lead exposure.

Comments must be submitted to the federal e-Rulemaking portal under Docket No. OSHA-2018-0004 on or before August 29th, 2022.

OSHA to Extend National Emphasis Program on Covid-19

On June 30th, the US Department of Labor (DOL) announced the extension of the National Emphasis Program for COVID-19 from its July 7th expiration date until further notice. The program aims to protect employees in high-hazard industries, including non-healthcare industries, from COVID-19. Provisions of the program targets hazard reduction and retaliation protection. The extension includes raising the coronavirus inspection goal from 5% to 7%, as this goal had already been surpassed. The program has proven to be successful in issuing citations and penalties to employers and providing monetary awards to employees who have brought retaliation claims against their employers. OSHA referred to the inspection standard as a minimum for state plans to emulate and continues to work on a permanent standard addressing COVID-19 workplace hazards.