June 2017 Scopelitis Legislative Trends Newsletter

The Scopelitis Law Firm recognizes that, in order to prepare for potential risks and strategic opportunities, businesses of all sizes must stay informed regarding regulatory and legislative change. We want to remind our clients of our continued commitment to responsiveness during periods of rapid transformation at both the state and federal level. Included below is a sampling of noteworthy developments or trends affecting transportation in Congress or the state legislatures.

If you want to speak with a Scopelitis attorney about these issues, visit our Legislative Services Practice Area page or contact the Scopelitis legislative team – Greg Feary, Shannon Cohen, or Prasad Sharma to further explore how we may provide the most well-tailored service for you.


LAW ALERT

Pursuant to a news release issued June 7, by the U.S. Department of Labor and consistent with the general direction the Firm has been signaling from the Department under the new administration, the Department announced the withdrawal of its informal guidance (“Administrator’s Interpretations”) on the issues of joint employment and independent contractors in 2015 and 2016 memos authored and issued under the former administration’s Wage and Hour Division Administrator, David Weil. This withdrawal has no effect on the legal obligations of employers under the Fair Labor Standards Act. For more on Scopelitis’ insight on this new development, click here.


STATE DEVELOPMENTS STATES SEEK INFRASTRUCTURE FUNDING

State legislatures have continued their efforts to create sustainable funding sources absent a comprehensive infrastructure plan at the federal level (this could be a longer wait than anticipated, a timeline of legislative priorities issued by the administration in June indicates infrastructure funding is not at the top of the list).

A few examples:

  • The Administration signals that infrastructure funding will continue to be shifted to the state and local levels.
  • A New Mexico attempt to increase fuel taxes and an increased interstate freight registration fee was vetoed by the Governor.
  • Louisiana was also unsuccessful in implementing an increased fuel tax.

LOWERING ROADBLOCKS TO PLATOONING

States across the nation are considering changes to state motor vehicle laws to clear the way for connected platoons and autonomous vehicles to operate within their borders. Such changes include blueprints and authorization for pilot programs, changes to the mandated following distance in the case of connected vehicles, and authorization to operate highly autonomous vehicles in a state.

In the mix:

  • Michigan, Ohio, and Pennsylvania have formed a coalition to work on connected and autonomous vehicles.
  • Virginia is working to attract and maintain autonomous vehicle development within the state.

STATES REACT TO GIG ECONOMY

Most states have now enacted legislation addressing at least some aspect of Transportation Network Company (“TNC”) operations for passenger vehicles. Carriage of property in the collaborative economy is now being expanded One primary issue is ensuring all vehicles providing transportation of property for compensation have sufficient commercial auto coverage for these operations. Virginia has stepped into the breach to ensure all such operations have a minimum level of coverage, regardless of how the transportation of property is arranged. States will continue to grapple with this issue as the collaborative economy for the transportation of property continues to develop and evolve. Industry participants should monitor these developments and approaches to ensure a level playing field for all service providers.


Federal Developments

TRUMP BUDGET

The President released his FY 2018 full proposed budget on May 23. Although Congress is not bound to pass the President’s proposal and never does whole-cloth, it reflects the administration’s priorities and thinking on issues. Included as part of the submission was an outline of principles for the President’s $1 trillion infrastructure program. Expecting to leverage private and state and local investment to get to the $1 trillion number, the budget requests $200 billion in direct federal spending over 10 years on all types of infrastructure (not just highways). Of that, $5 billion is requested for FY 2018. The principles highlight public-private partnerships, increased use of tolling, and

The President released his FY 2018 full proposed budget on May 23. Although Congress is not bound to pass the President’s proposal and never does whole-cloth, it reflects the administration’s priorities and thinking on issues. Included as part of the submission was an outline of principles for the President’s $1 trillion infrastructure program. Expecting to leverage private and state and local investment to get to the $1 trillion number, the budget requests $200 billion in direct federal spending over 10 years on all types of infrastructure (not just highways). Of that, $5 billion is requested for FY 2018. The principles highlight public-private partnerships, increased use of tolling, and potential sale of government assets to private investors (e.g., rest stops). As indicated in his preliminary blueprint, $499 million in funding available for surface transportation projects under the TIGER grant program would be eliminated.


DOT PERSONNEL

On May 16, the Senate confirmed Jeffrey Rosen to be the Deputy Secretary of Transportation, where he will be responsible for the day-to-day management of the department. In addition, President Trump has nominated a former General Manager at Lyft as the Under Secretary for Policy, generally viewed as the number three person at DOT and Steven Bradbury to be DOT General Counsel. The President has yet to name modal administrators, including the head of FMCSA.


REGULATORY REFORM

On May 17, the Senate Committee on Homeland Security and Government Affairs voted to pass a bill, S. 951, the Regulatory Accountability Act, that was sponsored by Sen. Rob Portman (R-OH) and Sen. Heidi Heitkamp (D-ND). The bill would impose new obligations and procedures on federal agencies before promulgating new rules, especially major or high-impact rules. The bill now awaits consideration by the full Senate, but having a Democrat as a sponsor offers some hope for further bipartisan support. The House has already enacted similar legislation.


TAX REFORM

On May 23, the tax-writing committee in the House, the Committee on Ways and Means, held a hearing on the border adjustment tax. The tax on imports is a central revenue mechanism under the House Republican tax reform outline but has drawn opposition from some Republicans as well as the Treasury Secretary, further complicating the prospects for tax reform. For now, Congressional Republicans remain committed to tax reform that is revenue-neutral and will need to come up with some way to generate revenues to make up for revenues lost as a result of corporate and individual rate cuts. President Trump has indicated he is fine with tax reform adding to the deficit in the short-term.


FMCSA WITHDRAWS MINIMUM INSURANCE LIMITS RULEMAKING

FMCSA announced it would no longer proceed with the rulemaking process to increase minimum public liability insurance required for motor carriers. In November 2014 the agency had published an Advanced Notice of Proposed Rulemaking – an information-gathering exercise – to address the issue but was unable to obtain sufficient hard data to move forward with a rulemaking. FMCSA will continue to monitor broker/freight forwarder financial responsibility requirements as required by MAP-21, the 2012 highway reauthorization bill.


ENTRY-LEVEL DRIVER TRAINING RULE

Although this rule, which would establish minimum driver training requirements for entry-level drivers, had been finalized by the Obama administration, the Trump administration has delayed its effective date on two occasions as part of the President’s regulatory review directives. The rule has been reviewed and cleared and therefore became effective on June 5.


FMCSA SPLIT-SLEEPER BERTH PILOT

FMCSA announced for public comment the design of a pilot program to allow participating drivers to split their sleeper berth time in more flexible ways than authorized under current law. Presently, drivers splitting sleeper berth time must have one stretch of no less than 8 hours. Under the pilot, a split period will have to be no less than 3 hours, thus allowing for splits of 3 and 7 hours, 4 and 6 hours or 5 and 5 hours. Motor carriers interested in having their drivers participate in the program must apply to FMCSA.


RESCISSION OF USDOL PERSUADER RULE SUBMITTED TO OMB

The USDOL has submitted to the Office of Management and Budget, a key step in the regulatory process, a proposed rule that would rescind the Obama administration’s “Persuader Rule”. Although the rule was enjoined by a federal district court in Texas, that ruling is being appealed. The rescission would, via rulemaking rather than the judiciary, eliminate the increased disclosure requirements with respect to advice given to management to fight unionizing attempts.