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Regulatory Playbook
Inside analysis direct from Washington, DC
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Regulatory Playbook

Inside analysis direct from Washington, DC

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 Issues

SBA Issues Interim Rule to Increase Receipts-Based Size Standards by 13.65% for Inflation
On November 17, 2022, the Small Business Administration (SBA) issued an interim final rule for receipt-based size standards, which increases all size standards by 13.65 percent (rounded to the closest $500,000, except for agricultural standards, which are rounded to the closest $250,000) as an additional adjustment for the effect of inflation since 2019. (See our July 22, 2019 Client Alert.) The SBA did not wait “at least every 5 years” to make the inflation adjustment that is required by statute but is making this significant adjustment after three years since its last adjustment for inflation.

FCC Modifies Equipment Authorization Rules for Certain Chinese Manufacturers
The FCC seeks further comment on the revocation of existing equipment authorizations issued to manufacturers on FCC Covered List.

ISDA and SIFMA Back Dealers’ Bankruptcy Interest Swap Termination Claims over Debtor Objection
In an amicus brief, the International Swaps and Derivatives Association and the Securities Industry and Financial Markets Association argued that the amount of a dealer’s termination claim under the 1992 ISDA Master Agreement need not account for the collateralization terms applicable to the defaulting party.

Congressional and Government Investigations in 2023: What to Expect from the New Congress
As the 118th Congress prepares to take office, those who may be targets of a new congressional agenda emphasizing government investigations should assess and address their vulnerabilities.

The Infrastructure and Investment Jobs Act (IIJA): An Anniversary Report
November 15, 2022, marked the one-year anniversary of President Biden signing the Infrastructure and Investment Jobs Act (IIJA) into law. The historic $1.2 trillion dollar investment into infrastructure marked a major bipartisan accomplishment for the 117th Congress and may ultimately represent one of the most impactful accomplishments of the Biden administration. The IIJA, which is also sometimes referred to as the Bipartisan Infrastructure Law (BIL), made investments into roads, bridges, electric vehicles, broadband, hydrogen hubs, cybersecurity, water infrastructure and grid resilience, among other areas of infrastructure.

By the Numbers: ASBCA’s Fiscal Year 2022 Annual Report
The Armed Services Board of Contract Appeals (ASBCA or Board) recently issued its fiscal year (FY) 2022 annual report, covering the period from October 1, 2021, through September 30, 2022. During FY 2022, 400 new appeals were docketed at the ASBCA, the same number of appeals that were docketed during FY 2021. A significant percentage of the appeals—114 of the 400 new cases (or roughly 25%)—were filed against the U.S. Air Force. During four of the previous five fiscal years, the U.S. Army Corps of Engineers was the agency against which most new ASBCA appeals had been filed.

Canada Announces Major Investment Incentives for Clean Energy and Hydrogen
On November 3, 2022, the Government of Canada released the 2022 Fall Economic Statement, outlining the government’s plans to make investments in workers that will grow the economy, create well-paying jobs, and tackle investment and productivity challenges. A major goal of the Economic Statement is boosting energy investment and taking “significant steps” to ensure Canada remains competitive in light of the passage of the U.S. Inflation Reduction Act (IRA). Many of the provisions in the Economic Statement do in fact channel provisions in the IRA. The two incentive packages create a strong investment environment for clean energy in North America.

New York Department of Financial Services Rule Will Require Banks to Collect Demographic Data with Commercial Credit Applications
On October 26, 2022, the New York Department of Financial Services (NYDFS) issued a revised proposed rule that, when finalized, will require New York banks to collect detailed demographic and financial data, including whether the applicant is a minority- or women-owned business (NYDFS Rule), when accepting business credit applications. Although the NYDFS is proposing this rule to fulfill a recent legislative amendment to the New York Community Reinvestment Act (CRA), it will have a broad impact on the commercial lending operations of New York banks that will extend far beyond the scope of their CRA obligations.

Government Accountability Office Publishes Fiscal Year 2022 Bid Protest Statistics
On November 1, 2022, the Government Accountability Office (GAO) published its Bid Protest Annual Report to Congress for Fiscal Year 2022. The GAO’s report, which is mandated by the Competition in Contracting Act, lists its key statistics for fiscal year 2022 bid protest activity. The report also includes a chart providing similar bid protest statistics for fiscal years 2018 – 2022. This five-year snapshot provides some valuable insight into current bid protest trends and developments at the GAO.

California Court of Appeal Affirms Trial Court’s Grant of Summary Judgment to Defendants in Proposition 65 Coffee Case
After 12 years of litigation, coffee manufacturers, distributors, and retailers are one step closer to closing the door on Proposition 65 warnings on coffee.

New York City’s Pay Transparency Law Takes Effect November 1, 2022: Are You Ready?
On May 12, 2022, New York City Mayor Eric Adams signed into law amendments to the New York City Human Rights Law (NYCHRL) now requiring pay transparency in job advertisements. This pay transparency law takes effect on November 1, 2022.

The Senate Ratifies the Kigali Amendment, Strengthening U.S. Commitment to Phase Down Hydrofluorocarbons
On September 21, 2022, the U.S. Senate voted to ratify the 2016 Kigali Amendment to the Montreal Protocol on Substances That Deplete the Ozone Layer. In so doing, the United States formally joins 137 other nations in pledging to reduce the production and consumption of hydrofluorocarbons (HFCs). HFCs are greenhouse gases commonly used in a variety of applications including refrigeration, air-conditioning, building insulation, fire extinguishing systems, refrigerated shipping and aerosols. Because individual HFCs often have significantly greater warming potential than carbon dioxide, HFCs are widely considered one of the most potent drivers of climate change.

Acquiring a Distressed Business in the United States: Key Issues for Prospective Buyers
Prospective buyers should prepare to take advantage of opportunities to acquire distressed businesses, as we are likely to see an uptick in distressed M&A soon.

NYDFS Continues Series of Fair Lending Enforcement Actions against New York State-Chartered Banks
On October 6, 2022, the New York Department of Financial Services (NYDFS) entered into a Consent Order with a New York state-chartered bank to resolve allegations of fair lending violations in the bank’s indirect auto lending program. NYDFS has made clear that it is focused on fair lending compliance, and institutions regulated by NYDFS—including both banks and non-bank lenders—must be prepared for detailed, data-driven reviews of their lending programs.

The Curious First Meeting of the MTC’s Model Receipts Sourcing Regulations Work Group
The meeting’s focus suggests the Multistate Tax Commission intends to address special industry regulations before general sourcing regulations.

New California Law Expands Pay Transparency and Reporting Requirements
As of January 1, 2023, California will require most employers to disclose “pay scale” information in job postings. SB 1162 also imposes a host of new reporting and pay transparency requirements for larger employers, including filing annual pay data reports beginning in May 2023.

Newsom Eliminates 40-Year-Old Exemption from California’s Pay-to-Play Law
California Government Code Section 84308, commonly referred to as the “Levine Act,” was enacted in 1982 to curb pay-to-play practices. Under the existing law, a party seeking a license, permit or other entitlement for use may not contribute more than $250 to an officer of the relevant agency while the proceeding is pending and for three months following a decision. Additionally, an officer of an agency must recuse him or herself from a decision involving a license, permit or other entitlement for use if the officer has received a contribution of more than $250 from a party, participant or his or her agent within the preceding 12 months.

Corporate Transactions: Don’t Leave the Political Law Stone Unturned
Especially in an election year, due diligence in corporate mergers and acquisitions is incomplete without reviewing political law compliance.

Additional Russian Measures Affecting International Investors and Cross-Border Trade
Russian government approval is now required for Western companies to exit LLCs, which complicates and will likely delay exit strategies.

FCC Proposes Action on Scam and Spam Text Messaging
In late September, the Federal Communications Commission (FCC or Commission) took a significant step toward reducing the amount of scam and spam text messages Americans receive on their mobile devices. In a wide-ranging Notice of Proposed Rulemaking (NPRM or Notice), the FCC seeks comment on dozens of questions, ideas and tentative conclusions that will, if the agency decides to move forward, inform rule changes affecting how wireless carriers must deal with malicious robotexts.

Prepare for Arrival: Aviation Finance Transitions to SOFR
Term SOFR emerges as the new market standard for aviation financing and leasing transactions.

DOE Announces $50 Million Award for the Design of a Fusion Pilot Plant
The September 2022 launch of this public-private partnership is the first step toward realizing the Biden Administration’s bold decadal vision for commercial fusion energy.

Modified DC Non-Compete and Anti-Moonlighting Law to Take Effect October 1, 2022
In January 2021, DC enacted a sweeping ban on almost all employer restrictions against employees engaging in other compensated work either during or after employment. In response to employer concerns, the applicability date of that law was repeatedly pushed back, so it never went into effect. On July 27, 2022, Mayor Bowser signed into law the Non-Compete Clarification Amendment Act of 2022 (the Act), which significantly updates and narrows the scope of the prior restrictions. Most notably, the Act:

DHS to Boost State and Local Cybersecurity Programs with $1 Billion in Grant Funding
On September 16, 2022, the Department of Homeland Security (DHS) announced a Notice of Funding Opportunity (Notice) for a “first-of its-kind” program providing cybersecurity grants for state, local and territorial governments across the country through the State and Local Cybersecurity Grant Program (SLCGP). The agency is poised to provide similar assistance to tribal governments through the Tribal Cybersecurity Grant Program (TCGP), which is expected to be announced in the coming months.

NRC Preliminary White Paper on Nuclear Fusion Indicates Paths for Regulatory Options
A September 2022 Preliminary White Paper issued by NRC Staff indicates that the agency is considering the option of regulating commercial fusion technologies via a risk-informed framework using 10 CFR Part 30.

What to Consider When Strategically Implementing the SEC’s New Pay for Performance Rule

Major Rule Changes
The specifics of the SEC’s new rule have been widely reported, but at a high level the SEC’s new pay versus performance rule, adopted August 25, 2022, requires a new table and narrative/graphical disclosure comparing “actually paid” compensation against company performance.

Proposed Rule to Designate Two PFAS Chemicals as Hazardous Substances Stands to Up the Ante for Site Remediation
On Friday, August 26, 2022, the U.S. Environmental Protection Agency (EPA) released a pre-publication notice of a long-awaited proposed rule to designate two of the most-studied per- and polyfluoroalkyl substances (PFAS)—perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS)—as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

The CHIPS and Science Act Offers Support to Advanced Nuclear and Fusion Industries
The Act includes significant funding to ensure long-term U.S. competitiveness in the advanced nuclear sector.

Federal Court Blocks Enforcement of Florida “Stop WOKE Act”
The court finds that the addition to the Florida Civil Rights Act turns the First Amendment “upside down.”

Workplace Safety Hazards in Retail Industry
OSHA has been turning its attention to workplace safety hazards in warehouses and retail stores.

General Services Administration Information Request Foreshadows Potentially Significant Rulemaking on Single-Use Plastic Packaging
Given the federal government’s buying power and wide use of plastic packaging, the GSA’s proposed rulemaking could have consequences for the plastics, packaging and shipping industries.

Inflation Reduction Act Revives Hope for Biden’s Climate Agenda
The far-reaching proposal would represent the largest legislative climate investment in U.S. history.

Historic $280 Billion Investment in Domestic Semiconductor Manufacturing and STEM Research and Development to Be Signed into Law
The legislation is the result of months of negotiations between Congressional Democrats and Republicans to support domestic semiconductor manufacturing and related research and workforce development efforts.

Senate Democrats Announce Breakthrough Bill on Energy, Climate, Tax Reform and Prescription Drug Pricing
The Inflation Reduction Act of 2022 would constitute a historic investment in the U.S. clean energy industry.

State Department Issues Two Open General Licenses Authorizing Reexports and Retransfers of Certain Defense Articles for Australia, Canada, and the UK
On July 13, 2022, as part of a new pilot program, the Department of State’s Directorate of Defense Trade Controls (DDTC) issued two open general licenses (OGLs) permitting certain reexports and retransfers of unclassified defense articles subject to the International Traffic in Arms Regulations (ITAR) within or between Australia, Canada, and the United Kingdom.

SBA Proposes Rule to Take Control of All Veteran-Owned Certifications
The Small Business Administration (SBA) has proposed consolidating and making significant changes to the Veteran-Owned Small Business (VOSB) and the Service-Disabled Veteran-Owned Small Business (SDVOSB) programs, including the elimination of self-certification.

Department of Labor Proposes Rule to Give Service Employees a Right of First Refusal under Successor Contracts
To avoid displacement of current service employees, the proposed rule will require contractors and their subcontractors to offer qualified employees a right of first refusal of employment under the successor contract.