One Voice | Government Advocacy for the Metalworking Industry

 

On December 10, 2021, the Biden administration released the semi-annual preview of its regulatory priorities for the coming year. Issued by every administration and formally known as the Unified Agenda, the release offers a blueprint on how the Administration will move forward to implement their priorities within each agency. 

 

Several top One Voice interests appear in the Unified Agenda including plans to issue a new definition for Waters of the U.S.; review the National Ambient Air Quality Standards for Particulate Matter with a proposed rule in August 2022 and a final rule by March 2023; issue a final rule tightening near-term vehicle greenhouse gas standards sometime this month; issue a final rule rescinding the Trump benefit-cost analysis rule for regulations under the Clean Air Act in February 2022; issue a proposed rule restoring portions of the Obama-era Tracking of Workplace Injuries and Illnesses rule sometime this month; and releasing a proposed rule in September 2022 to update Lock-Out/Tag-Out.

 

The U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Corps) proposed a rule on December 7, 2021, to provide an interim definition of waters of the United States (WOTUS). This “skeletal” proposed rule is the first of two steps in the rulemaking process to update the definition of WOTUS under the Clean Water Act (CWA). This first step seeks to establish a constant definition that will help provide "stable implementation" of the CWA while the Biden administration develops a durable definition of WOTUS.

 

The proposed rule interprets WOTUS to mean the waters defined by a collection of Corps and EPA regulations referred to as the "1986 regulations," with amendments to reflect the agencies' interpretation of the statutory limits on the scope of WOTUS as dictated by Supreme Court decisions on CWA jurisdiction in the 2000s. 

 

Trump’s Navigable Waters Protection Rule (NWPR), adopted in 2020, narrowed the definition of WOTUS to include only six categories of water. This was a departure from the WOTUS rule adopted by the Obama Administration which broadened the jurisdiction to consider industrial ditches as “tributaries,” leading to costly maintenance activities, and expensive and time-consuming dredge and fill permits as well as stormwater retention ponds, fire ponds, and on-site impoundments, leading to point source discharge and other permit requirements. 

 

The proposed rule would interpret WOTUS to include: traditional navigable waters, interstate waters, the territorial seas, and their adjacent wetlands; most impoundments of WOTUS; tributaries to traditional navigable waters, interstate waters, the territorial seas, and impoundments that meet either the relatively permanent standard or the significant nexus standard; wetlands adjacent to impoundments and tributaries, that meet either the relatively permanent standard or the significant nexus standard; and "other waters" that meet either the relatively permanent standard or the significant nexus standard.

 

In August 2021, the U.S. District Court in Arizona struck down the NWPR established by the Trump administration, stating that the Trump officials committed serious errors while enacting the regulation and that leaving it in place could lead to “serious environmental harm.” Following that decision, the WOTUS definition revered to the agencies' pre-2015 approach which included interpreting WOTUS by the 1986 regulatory definition as well as various policies written during the 1980s and 1990s and guidance issued following the Supreme Court rulings in the 2000s. The proposed rule, however, does not just reestablish the 1986 regulations and allow the agencies to interpret them in light of the Supreme Court decisions, but actually codifies the decisions into the regulation. 

 

The agencies are still planning on releasing in February 2022, the second step rulemaking to build on this foundational proposed rule and further define WOTUS.

 

The IRS on December 6 issued guidance on the early end of the employee retention tax credit, which was terminated by Congress three months early in the recently-enacted infrastructure law. 

 

The credit was originally set to expire at the end of the year but was retroactively ended to pay for provisions in the infrastructure bill, meaning that some businesses received advanced payments. IRS Notice 2021-65 lays out the steps businesses should take if they paid wages after September 30, 2021, and received an advance payment of the ERC for those wages or reduced employment tax deposits in anticipation of the credit for the fourth quarter of 2021. 

 

According to the guidance, businesses that received advanced payments in the fourth quarter can avoid penalties if they simply repay them by the time their tax returns are due. For employers that reduced deposits expecting to claim the credit in the fourth quarter, the guidance states that the IRS would waive penalties if they followed rules to claim the credit; deposited the amounts they retained on or before the due date for wages paid on Dec. 31, 2021, regardless of whether they actually pay wages on that date; and report how much they owe the IRS in the fourth quarter. Businesses have until December 20 to deposit the payroll taxes before penalties kick in. 

 

As Congress works to pass President Biden’s economic and social agenda, tax credits for U.S.-made electric vehicles continue to rankle U.S. trade allies. 

 

Canadian and Mexican officials have warned U.S. lawmakers that they consider the proposed incentives inconsistent with U.S. obligations under the U.S.-Mexico-Canada Agreement (USMCA) and are unallowable under World Trade Organization (WTO) rules. Both countries have already threatened the imposition of tariffs should the provision be passed by Congress as well as launching a dispute under USMCA or at the WTO. 

 

The measures have drawn concern from the European Union (EU) and other trading partners as well. The EU also voiced concerns with the design of the incentives with European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis stating that the EV tax credit would “in their current state, result in unjustified discrimination against EU car and car component manufacturers, whether imported or manufactured in the US.” 

 

The proposed incentives are included as part of the Build Back Better Act, which passed the House last month and is currently being negotiated in the Senate. Provisions in the bill would provide up to $12,500 in tax credits for buying an electric vehicle, including $4,500 if a vehicle is assembled at U.S. plants with unionized labor and $500 if it has at least 50 percent domestic content and U.S.-made battery cells. Starting in 2027, credits would only be available for vehicles assembled in the U.S.