Welcome to Pillsbury’s Regulatory Playbook, where you’ll find news and insights on the regulatory trends that are driving markets and shaping businesses. Here, Pillsbury’s market-leading regulatory group illuminates critical developments at the intersection of law and policy. If you need to know what’s happening, why it’s happening and how to respond, consult the Playbook.
Trending IssuesCal/OSHA to Vote on Revising COVID-19 Emergency Standards on June 3
As previously alerted, the California Occupational Safety and Health Administration (Cal/OSHA) recently proposed revisions to its COVID-19 Prevention Emergency Temporary Standards (ETS), which were to be considered by the Occupational Safety and Health Standards Board (Board) on May 20, 2021. However, on the eve of the meeting, Cal/OSHA issued a memorandum to the Board, requesting the Board not vote on the proposed revisions and allow Cal/OSHA to present a new proposal at a future meeting. On May 28, 2021, Cal/OSHA published an updated version of the proposed revisions, which will be the subject of public comment, Board discussion, and a Board vote on June 3, 2021.
NRC Seeking Input to Update NEPA Process for Categorical Exclusions
In an important step furthering recent commitments to modernize its environmental review process, the NRC has requested input on its plan to update and expand the field of categorical exclusions in its regulations implementing the National Environmental Policy Act of 1969.
China Publishes New Draft Regulations on Data Security Management of Automobile Operators to Protect Privacy
On May 12, 2021, the Cyberspace Administration of China (CAC) published the Several Regulations on the Management of Automobile Data Security (Draft for Comment) (Draft Regulations). The Draft Regulations are open for public comment until June 11, 2021. According to the CAC’s statement, due to growing concerns over personal data security and privacy protection in the People’s Republic of China (PRC), the Draft Regulations aim to strengthen protection of personal information and important data in automobile-related activities, as well as safeguard national security and the public interest. Below is our summary of the highlights of the Draft Regulations.
Cybersecurity Executive Order Will Impact Government Contractors
President Biden’s new Executive Order to improve cybersecurity involves a particular focus on federal government and contractor systems.
OSHA and Cal/OSHA Guidance for Fully Vaccinated Employees
As COVID-19 cases appear to be on the decline and more people are opting to become vaccinated, public health departments and workplace safety agencies are concurrently updating recommendations and guidance to reflect changes in the course of the pandemic. Although such recommendations and guidance are often in flux, below is a summary of where federal and California workplace safety agencies currently stand on the issue of fully vaccinated employees.
CEAA and GREEN Act Present Competing Frameworks for Energy Tax Credits
As compared to the GREEN Act and other recent proposals, the Clean Energy for America Act would create a more fundamental shift in energy tax credits.
The CEAA Proposes Alternative Structuring of Energy Tax Credits
On April 21, 2021, Senator Ron Wyden (D-OR) introduced the Clean Energy for America Act (the CEAA), a bill that would create emissions-based incentives to spur growth in clean power, clean transportation and energy efficiency. The tax framework would be technology-neutral and is intended to allow power producers to qualify for either a production tax credit or an investment tax credit for facilities with zero or net negative carbon emissions.
China’s MOFCOM Issues Internal Export Control Program Guidelines
On April 28, 2021, China’s Ministry of Commerce (MOFCOM) published The Guiding Opinions on the Establishment of an Internal Compliance Program for Export Control by Exporters of Dual-use Items (Opinions) along with a 35-page Guidelines for Internal Compliance of Export Control of Dual-use Items (Guidelines). The Opinions and Guidelines replace MOFCOM’s previous Opinions published in 2007 and are the latest steps taken by MOFCOM for the implementation of China’s Export Control Law effective on December 1, 2020 (see Pillsbury alert).
Time’s Up!: The Court Rejects the Government’s Request for a Longer Limitations Period Applicable to Fraud Counterclaims
Contractors often face the dilemma of whether they should appeal an adverse contracting officer final decision (COFD) issued under the Contract Disputes Act (CDA) to the cognizant Board of Contract Appeals or the Court of Federal Claims. One factor favoring the Boards is that the Court has jurisdiction over fraud counterclaims and the Boards do not. The Department of Justice (DOJ) (which represents the government at the Court) has asserted such fraud counterclaims with more regularity in recent years. Contractors should know that when the government asserts a fraud counterclaim, the Court’s decision in Lodge Constr., Inc. v. United States, No. 13-499, 2021 WL 1418847 (Fed. Cl. Apr. 14, 2021), makes clear that the government must adhere to a hard deadline--perhaps with no exceptions.
China Cancels Export Tax Rebate on Steel Products
On April 28, 2021, China’s Ministry of Finance (MoF) and the State Administration of Taxation (SAT) issued a short notice (Notice No. 16) on their official websites to cancel VAT rebates on the exports of certain steel products starting May 1, 2021.
ASBCA Confirms the “Goldilocks Principle” in Government Contract Appeals
Contractors must ensure that they do not appeal a contracting officer’s decision too early or too late lest they find that the courts and board have no jurisdiction. Yet, the government continues to issue directions that provide no certainty on the issue and, indeed, serve only to muddle the question of what constitutes an appealable final decision. Last month, the Armed Services Board of Contract Appeals (ASBCA or Board) issued a decision in the appeal of Northrop Grumman Corporation, ASBCA No. 62189, dismissing the appeal for lack of jurisdiction and highlighted what these authors will refer to as “the Goldilocks Principle” for when contractors can appeal a contracting officer’s decision that certain costs are not allowable. Frustratingly, the Government often issues unclear decisions that can leave contractors wondering whether the timing for appeal is too early, too late or just right.
Data Privacy Fines and Damages “Double Jeopardy”: UK Supreme Court Hears Google “Class Action”
This week sees a key hearing before the UK Supreme Court in the case of Lloyd v Google, an event long awaited by those familiar with data protection law proceedings in Europe.
President Biden Issues an Executive Order Increasing the Minimum Wage for Many Employees of Federal Contractors to $15.00
On April 27, 2021, President Biden signed an Executive Order raising the minimum wage paid by Federal contractors and subcontractors to $15.00 per hour, beginning on January 30, 2022. The Federal minimum wage currently is $10.95 per hour for all workers on Federal construction and service contracts, based on President Obama’s 2014 Executive Order 13658, which had raised that minimum wage to $10.10 per hour and provided for adjustment for inflation. These Executive Orders do not change the current minimum wage of $7.25 under the Fair Labor Standards Act (FLSA) applicable to non-exempt employees who do not work for government contractors, and to employees of government contractors who do not work on or in connection with Federal construction and service contracts.
Court Finds Pandemic Does Not Satisfy Lease’s Casualty Clause
This is another in a series of alerts on insolvency topics affecting real estate. In this alert, we discuss a new case from the Southern District of New York that extends the trend of courts enforcing leases against tenants forced to close due to the impact of the COVID-19 pandemic.
COVID-19 Stimulus Package Includes $170 Billion for Education
The American Rescue Plan Act of 2021 (ARP)—the latest coronavirus-related stimulus legislation signed into law by President Biden on March 11, 2021—appropriates more than $122 billion for elementary and secondary education and almost $40 billion for institutions of higher education (IHEs). These funds are in addition to the relief funding allocated under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as described here and here, as well as under the Consolidated Appropriations Act, 2021 (CAA), as described here. Funds appropriated under the ARP will remain available through September 30, 2023.
Congress Appropriates New Funds, Extends Eligibility for Shuttered Venue Operator Grants
The American Rescue Plan Act, signed into law on March 11, 2021 and summarized here, includes a brief but important section that will permit the recipients of Paycheck Protection Program (PPP) loans issued after December 27, 2020 to remain eligible for grants under the “Grants for Shuttered Venue Operators” (Grants) program, which the Small Business Administration (SBA) has yet to launch.
$1.9 Trillion COVID-19 Relief Law Includes Funding for Several Broadband-Related Measures
The American Rescue Plan Act of 2021, the latest COVID-19 relief package signed into law on March 11, 2021, includes several provisions that target funding for broadband connectivity and infrastructure projects. Specifically, the law provides $7.1 billion to support connectivity and the purchase of eligible devices for schools and libraries, and establishes additional sources of funding for broadband through support to state and local governments, as well as payment assistance to individuals facing financial hardships associated with the coronavirus pandemic.
Congress Passes $1.9 Trillion COVID-19 Relief Package
President Biden has signed the next COVID-19 economic relief package into law. The American Rescue Plan Act was passed by the Senate late last week and was adopted by the House of Representatives on Wednesday. While smaller than the $2.2 trillion CARES Act passed in March 2020, the American Rescue Plan represents a major spending package, aimed at stabilizing the economy, protecting job growth and mitigating the ongoing impacts of the COVID-19 pandemic.
New York State Assembly Reintroduces Legislation Imposing Recording Tax on Mezzanine Debt and Certain Preferred Equity Investments
On January 22, 2021, members of the New York State Assembly introduced legislation that would require the recording of UCC financing statements in connection with the origination of mezzanine debt and certain types of equity investments in real estate assets when there exists mortgage debt with respect to same, underlying real property asset(s). It also would allow municipalities to collect recording taxes in connection with the creation of such indebtedness or investments. This bill is the most recent iteration of a previous proposed bill that was introduced last year in the New York State Senate.
DC Council Passes COVID-19 Pandemic Emergency Workplace Safety Statute
On February 1, 2021, DC Mayor Bowser signed emergency legislation passed by the DC Council, requiring DC employers to “adopt and implement social distancing and worker protection policies to prevent transmission of COVID-19 in the workplace” and that adhere to all applicable Mayor’s Orders related to the COVID-19 public health emergency. Titled the “Protecting Businesses and Workers from COVID-19 Congressional Review Emergency Amendment Act of 2021,” the Act was published in the DC Register on February 12, 2021 but took effect as of the Mayor’s signature and will remain in effect for up to 90 days. A companion bill (B24-0058), the “Workplace Safety During the COVID-19 Pandemic Emergency Amendment Act of 2021,” was passed by the Council and was transmitted to the Mayor on February 11, 2021; it has similar provisions and would replace—and have the effect of extending—the Congressional Review Emergency Amendment Act’s provisions.
The Consolidated Appropriations Act, 2021 Extends and Expands Eligibility for Employee Retention Tax Credit
The Consolidated Appropriations Act, 2021 (the Act), signed into law in December 2020, extends and expands the employee retention tax credit originally enacted in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
Tour de Force: Contract Terminations Due to COVID-19-Based Force Majeure – Natural Disasters
On December 16, 2020, in a decision likely to have far-reaching implications for COVID-19 contract disputes, Judge Denise Cote of the Southern District of New York found that COVID-19 qualifies as a “natural disaster” excusing a contractual counterparty’s nonperformance under a force majeure provision. The plaintiff in JN Contemporary Art LLC v. Phillips Auctioneers, LLC, No. 1:20-cv-04370-DLC (S.D.N.Y. 2020) had entered into an agreement with an auction house (the defendant), pursuant to which the auction house agreed to hold an in-person event in May 2020 to sell the plaintiff’s artwork and guaranteed that the plaintiff would receive at least $5 million in sales proceeds. In March 2020, following governmental shutdown orders, the auction house postponed the event until June.
New ESG Disclosure Guide for Leveraged Finance Transactions
On 19 January 2021, the Loan Market Association (LMA) and the European Leveraged Finance Association (ELFA) jointly published an environmental, social and governance (ESG) disclosure guide for leveraged finance transactions (the Guide). The Guide recognises the dichotomy between the increasing importance of ESG factors in leveraged finance credit analyses and inconsistencies between ESG disclosures.
Biden’s Executive Order on Ethics Preserves and Strengthens Obama’s Language, while Trump Revokes his Own Ethics Pledge in the Final Moments of his Presidency
Interacting with federal officials is a highly regulated area. Limits apply to companies and organizations that are giving anything of value to any federal official. There are also pre- and post-employment restrictions that are important to consider when an employee leaves to join government service, or a former government employee is retained or employed. These laws differ depending on the circumstances, and it is critical to know and understand the right rules for the situation. The position of the person in the government, including whether they are/were a political appointee or held a career position, impacts the rules. The restrictions increase depending on the seniority of the individual involved. In addition, the circumstances of the company or organization are critical to understand as permissibility generally depends on whether the individual is a lobbyist or a company or organization that employs lobbyists. Care must be taken to navigate the right rules for the circumstances.
TopicsCOVID-19 (Coronavirus) Congressional and Agency Debates Cybersecurity, Privacy & Data Protection Employee Relations Energy and Climate Change Global Trade and Investment Innovation and Trends Government Contracts Internet & Social Media White House Actions
Pillsbury’s Washington Weekly Briefing – June 17