TAUC Legislative & Regulatory Update, December 2021
After months of delays and intraparty negotiations, President Joe Biden signed the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act (IIJA) into law on November 15th. The legislation provides $550 billion in new infrastructure spending to finance improvements to the nation's infrastructure. But almost as soon as the ink was dry, a new battle began over another controversial (and even more expensive) bill.
And as if that wasn't enough to deal with, Congress has to enact legislation to keep the government open after December 3. It appears increasingly likely that another continuing resolution will be passed to fund the government through early next year. Congress must also take action to increase the nation's borrowing limit. The Treasury Department projects that the debt ceiling will need to be increased by December 15th to ensure the federal government does not default on its debt.
As we kick off what is expected to be a busy month in Washington, here is an exclusive update from TAUC on policy and regulatory issues of vital interest to contractors and the union construction and maintenance industry.
Senate Democrats to Consider Build Back Better Reconciliation Legislation
On November 19th, the House voted 220-213, with one Democrat joining all the Republicans in voting against, to pass H.R. 5376: The Build Back Better Act (BBBA). House moderates waited to pledge their support of the $2.2 trillion legislation until the Congressional Budget Office (CBO) analyzed the proposal. CBO scoring indicated that the bill would increase the deficit by $367 billion over the next decade through $1.64 trillion in new spending against $1.27 trillion in offsets. Notably, the CBO also found that increased IRS enforcement would generate an additional $200 billion in revenue.
Senate Moderates, who have expressed opposition to the size and scope of the BBBA legislation, will likely trim down the package.
The major revenue provisions in the bill include:
- A 15% minimum "book-tax" for corporations with income over $1 billion ($320 billion)
- A 1% surtax on corporate stock buybacks ($125 billion)
- A 5% surtax on modified adjusted gross income that exceeds $10 million and an additional 3% tax on income that exceeds $25 million ($227 billion)
- A 3.8% net investment income tax expanded to business income ($250 billion)
The Build Back Better Act includes up to four weeks of paid leave for the birth or adoption of a child, to care for a family member with a serious health condition, or for a serious health condition that prevents an employee from working. Eligible workers would be entitled to the benefit within one year, starting in 2024. The benefit amount is related to average weekly earnings and hours: 90% of the first $15,080 in annualized earnings, 73% for annualized earnings of as much as $34,248, and 53% for annualized earnings up to $62,000.
The legislation includes scaled-down elements of the PRO Act, including:
- Penalties for employers that commit unfair labor practices under the National Labor Relations Act
- Increased penalties for violations related to workplace safety, child labor, and minimum wage
As we reported last month, the bill includes $555 billion in climate and clean energy investments programs and a number of provisions to create new tax credits. It also restructures existing renewable energy and energy efficiency incentives within the tax code. Additionally, it includes increased tax credit benefits for projects that meet prevailing wage and apprenticeship utilization requirements.
More energy-related provisions include:
- Extends the 45Q tax credit, which provides increased tax credits for carbon capture and storage projects.
- Tax credits for domestic manufacturers and fabricators of solar and wind components, which are currently overwhelmingly made overseas.
- $1 billion for zero-emissions vehicle infrastructure and tax credits for new qualified plug-in electric drive motor vehicles
Federal Court Issues Stay on Federal Vaccine Mandate
Earlier this month the Occupational Safety and Health Administration (OSHA) issued an emergency temporary standard (ETS) requiring firms with more than 100 employees to implement vaccine mandates or frequent testing. Opponents of the mandate pursued litigation to prevent enforcement soon after it was issued. The U.S. Court of Appeals for the Fifth Circuit, which covers Texas and other Southern states, issued a stay against the vaccine mandate. The court opinion stated that the ETS is illegal and potentially unconstitutional. OSHA has ceased enforcing the ETS following the ruling.
After the Fifth Circuit issued the stay, the Biden administration requested that the Sixth Circuit dissolve the action. The Administration argued in a brief that the OSHA has the authority to protect workers from COVID in the workplace. The Sixth Circuit will rule on the request after December 10th, meaning that the decision will occur after the December 6th compliance deadline for employers to develop a vaccine policy determine employee vaccination status. Under the ETS, employers were also required to provide leave for worker vaccination or recovery. This timeline also makes it unlikely the rule will be in effect by the January 4th deadline for employers with at least 100 employees to ensure that their workers are fully vaccinated or to begin testing them regularly. The six-month emergency rule will expire in early May of next year.
Recently, OSHA announced that it was extending the comment period on the ETS by 45 days until Jan. 19, 2022. The agency claimed that the extension would allow stakeholders additional time to review the ETS and collect information and data necessary for comment.
DOL Proposes to Rescind Trump Era Industry-Recognized Apprenticeship Program Rule
On November 15th, the Department of Labor's (DOL) Employment and Training Administration issued a proposed rule to rescind a 2020 rule allowing for the creation of Industry-Recognized Apprenticeship Programs (IRAPs). While the construction industry was exempted from IRAPs in the final rule, the union construction industry supported repeal of the IRAP rule over concerns that the exemption could be removed, allowing for IRAPs to be utilized in the construction industry.
The notice of proposed rulemaking outlined the department's belief that it is no longer "appropriate or necessary to create an additional apprenticeship model, particularly one that does not guarantee the same protections for apprentices." The Biden administration has been critical of the regulation, which they argue failed to deliver tangible benefits to workers. DOL will accept comments on the proposed rule until January 13th of next year.
Repeal of the Financial Factors Rule
TAUC joined the other members of the Construction Employers of America in submitting comments in support of DOL's proposed rule to rescind the Trump-era Financial Factors rule. The proposed rule would remove barriers in the Trump Administration's rule limiting fiduciaries from considering factors other than the rate of return when selecting plan investments or exercising proxy voting rights. Once finalized, the proposed rule would allow trustees of construction industry collectively bargained multiemployer plans to consider factors beyond just the economic value of the investment - such as additional man hours and plan contributions - when assessing a fund's projected return on investment decisions. Comments on the proposed rule are due on December 13, 2021.